Streamlined Sales Tax Governing Board
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The Marketplace Fairness Act of
2015(MFA)
 Grants state and local jurisdictions the right to require the collection of
sales and use taxes by sellers with no in-state physical presence (“remote
seller”)
 Two options:
 Streamlined option (180 days):
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State publication of notice of intent to exercise authority
Full membership in the Streamlined Sales and Use Tax Agreement
 Alternate option (6 months):
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Legislative identification of the sales and use taxes to which authority
applies
Legislative identification of the products and services to which authority
shall not apply
Adoption of federal minimum simplifications
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Federal Minimum Simplifications –
MFA – Alternate Path
State and local sales and use tax simplifications required:
 Central administration of tax for remote sellers
 Single audit for all state and local taxing jurisdictions
within a state for remote sellers
 Single return for remote sellers
 Limitations on return filing frequency for remote sellers
 Uniform state and local tax base
 Uniform sourcing rules for remote sellers
 Certain liability relief for remote sellers and certified
software providers
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Federal Minimum Simplifications –
MFA – Alternate Path
State must provide:
 Taxability and exemption information
 Rates and boundary database
 Free software
 Certification procedures for “certified software
providers”
 Remote sellers can use a certified software provider of
their choice.
 90 days notice for state and local tax rate changes
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Small Seller Exception – MFA
 Sellers with $1.0 million or less in gross annual receipts
in total remote sales in the U.S. in the prior calendar
year (small sellers) are not subject to the collection
requirement.
 Remote sales of related persons are aggregated for
purposes of determining small seller exception.
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What the MFA Does NOT Do
 Create nexus or alter standards for determining nexus
 Encourage adoption of any new taxes by the states
 Subject sellers to non-sales or use tax types (i.e., business and
occupation taxes, income taxes, etc.)
 Permit or prohibit states from licensing or regulating persons,
requiring any person to qualify to transact interstate business,
subjecting any person to taxes unrelated to products and
services, or exercising authority over matters of interstate
commerce.
 Affect intrastate sales; or
 Change the sourcing for products covered by the Mobile
Telecommunications Sourcing Act, 4 U.S.C. 116 -126 (2002)
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Limitation on Initial Collection
Authority
 State cannot exercise authority:
 Until the date that is 1 year after the date of enactment
AND
 Between October 1 and December 31 of the first calendar
year beginning after the date of enactment
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Definitions
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Certified software provider
Locality
Member State
Person
Remote Sale
Remote Seller
Sourced
State
Streamlined Sales and Use Tax Agreement
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Federal Preemption
 Does not preempt or limit any power exercised or to be
exercised by a State or local jurisdiction under the law
of such state or under any other federal law
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Status of MFA Legislation
 Introduced in Senate on March 10, 2015
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Questions on MFA?
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Remote Transactions Parity Act
Similarities and Differences
Between RTPA and MFA
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The Remote Transactions Parity Act of
2015 (RTPA) – Discussion Draft
 Provides states with the exact same two options for gaining
remote seller collection authority as the MFA
 Includes the minimum simplification requirements
contained in the MFA, plus additional protections for
remote sellers and certified software providers.
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The Remote Transactions Parity Act of
2015 (RTPA) – Discussion Draft
Additional provisions:
 If a remote seller uses a certified software provider,
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audits must go through that provider and not the seller
Remote sellers with less than $5M of gross receipts in
the taxable year may not be audited, except in cases of
fraud
3 year statute of limitations for assessments
The state must provide a taxability and exemption table
The state must provide a database showing rates and
boundaries
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The Remote Transactions Parity Act of
2015 (RTPA) – Discussion Draft
Additional provisions:
 Free access to national CSPs whose software can:
 Determine correct rate based on sourcing rules
 Calculate tax due at time of sale
 Generate and file returns electronically
 Remit the taxes to the States electronically
 Report all transactions processed to the remote seller
 Respond to audit requests by the states
 Safeguards and protection of consumer privacy
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The Remote Transactions Parity Act of
2015 (RTPA) – Discussion Draft
Additional provisions:
 Free access includes:
 Installation
 Set-up
 Maintenance
 Must be capable of calculating and filing in all states
qualified under RTPA
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The Remote Transactions Parity Act of
2015(RTPA) – Discussion Draft
Additional provisions:
 State must provide:
 Certification procedures for “certified software providers”
 State may delegate certification to others but must retain
final approval over certification decisions
 State cannot deny certification arbitrarily or capriciously
 State must complete certification by first day of calendar
quarter at least 180 days after request for certification
 State must certify multiple national CSPs
 State must compensate CSPs for their services
 Remote sellers can use a certified software provider of their
choice.
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The Remote Transactions Parity Act of
2015(RTPA) – Discussion Draft
Additional provisions:
 Certain liability relief for remote sellers and certified
software providers
 For remote seller if CSP makes error
 For CSP if incorrect information from remote seller
 For both if incorrect information provided by state
 For both if purchaser provides necessary exemption
information to claim exemption within 90 days of sale
 For both if 90 days notice for changes to taxability and
exemption information and state and local tax rate changes
not provided as long as collecting at immediately preceding
rates
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The Remote Transactions Parity Act of
2015(RTPA) – Discussion Draft
Additional provisions:
 Accept registrations from central online
registration system at no charge to seller or CSP
 State must compensate remote sellers no less than the
amount, if any, it provides to nonremote sellers
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The Remote Transactions Parity Act of
2015(RTPA) – Discussion Draft
Additional provisions:
 Small Seller Exception
 For first year - remote sellers with $10 million or less in
gross annual receipts in the prior calendar year (small
sellers) are not subject to the collection requirement.
 For second year - $5 million
 For third and subsequent - $1 million
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The Remote Transactions Parity Act of
2015(RTPA) – Discussion Draft
Additional provisions:
 Remote Seller – person who makes remote sales in a state
without having “physical presence”
 Physical presence – business activities in a state which
include any of the following in the taxable year:
 Individual physically in the state or assigning one or more
employees to be in the state
 Using services of an agent to establish or maintain market
(exclusive requirement)
 Owning/leasing tangible personal property or real property in
the state
 Does NOT include presence in the state for less than 15 days
or presence to conduct limited or transient business activity
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Dispute Resolution
 District courts of the United States have original and
exclusive jurisdiction over suits in equity and actions at
law to determine compliance with the RTPA.
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Federal Preemption
 Except as provided in the RTPA, no state shall enact or
enforce any law, etc. requiring remote sellers to collect
tax.
 The RTPA is construed to preempt and limit any
conflicting power exercised or to be exercised by a
State or local jurisdiction under the law of such state
or local jurisdiction
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Status of RTPA
 This is only a discussion draft – nothing has been
formally introduced.
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Remote Transactions Parity Act
Questions on RTPA?
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