MTC Analysis of Online Sales Simplification Act of 2016
On August 25th, U.S. Rep. Bob Goodlatte released a draft of federal legislation, the Online Sales Simplification Act of 2016, that would require remote sellers, as defined, to collect and report sales tax to a single state where the seller’s affiliated group has its greatest number of employees (the so called origin state), using that state’s tax base, but using the destination state’s rate. A copy of the draft legislation is available by clicking here
The MTC, in conjunction with others including the FTA, analyzed the draft and concludes that the potential costs and difficulties in implementing the draft exceed any benefits to the states. Moreover, the draft creates political and constitutional issues that are as great as those it seeks to resolve, making the draft’s hybrid-origin-based approach unworkable even if its drafting problems are addressed. The MTC’s analysis is available by clicking here
Inquiries about the analysis can be directed to the Commission’s legislative counsel, Thomas Shimkin, via email
or by phone at 202-650-0300.