Sourcing

Digital Goods and Services Tax Fairness Act of 2019

SEC. 3. SOURCING LIMITATION.

(a) Seller Obligation.—

(1) IN GENERAL.—Subject to subsection (e)(2), a seller shall be responsible for obtaining and maintaining in the ordinary course of business the customer tax address with respect to the sale of a covered electronic good or service, and shall be responsible for collecting and remitting the correct amount of tax for the State and local jurisdictions whose territorial limits encompass the customer tax address if the State or local jurisdiction has the authority to require such collection and remittance by the seller.

(2) CERTAIN TRANSACTIONS.—When a customer tax address is not a business location of the seller under clause (i) of section 7(4)(A)—

(A) if the sale is a separate and discrete transaction, then a seller shall use reasonable efforts to obtain a customer tax address, as such efforts are described in clauses (iii), (iv), and (v) of section 7(4)(A), before resorting to using a customer tax address as determined by clause (vi) of such section 7(4)(A); and

(B) if the sale is not a separate and discrete transaction, then a seller shall use reasonable efforts to obtain a customer tax address, as such efforts are described in clauses (ii), (iii), (iv), and (v) of section 7(4)(A), before resorting to using a customer tax address as determined by clause (vi) of such section 7(4)(A).

(b) Reliance On Customer-Provided Information.—A seller that relies in good faith on information provided by a customer to determine a customer tax address shall not be held liable for any additional tax based on a different determination of that customer tax address by a State or local jurisdiction or court of competent jurisdiction, unless and until binding notice is given as provided in subsection (c).

(c) Address Correction.—If a State or local jurisdiction is authorized under State law to administer a tax, and the jurisdiction determines that the customer tax address determined by a seller is not the customer tax address that would have been determined under section 7(4)(A) if the seller had the additional information provided by the State or local jurisdiction, then the jurisdiction may give binding notice to the seller to correct the customer tax address on a prospective basis, effective not less than 45 days after the date of such notice, if—

(1) when the determination is made by a local jurisdiction, such local jurisdiction obtains the consent of all affected local jurisdictions within the State before giving such notice of determination; and

(2) before the State or local jurisdiction gives such notice of determination, the customer is given an opportunity to demonstrate in accordance with applicable State or local tax administrative procedures that the address used is the customer tax address.

(d) Coordination With Sourcing Of Mobile Telecommunications Service.—

(1) IN GENERAL.—If—

(A) a covered electronic good or service is sold to a customer by a home service provider of mobile telecommunications service that is subject to being sourced under section 117 of title 4, United States Code, or the charges for a covered electronic good or service are billed to the customer by such a home service provider; and

(B) the covered electronic good or service is delivered, transferred, or provided electronically by means of mobile telecommunications service that is deemed to be provided by such home service provider under section 117 of such title,

then the home service provider and, if different, the seller of the covered electronic good or service, may presume that the customer’s place of primary use for such mobile telecommunications service is the customer tax address described in section 7(4)(A)(ii) with respect to the sale of such covered electronic good or service.

(2) DEFINITIONS.—For purposes of this subsection, the terms “home service provider”, “mobile telecommunications service”, and “place of primary use” have the same meanings as in section 124 of title 4, United States Code.

(e) Multiple Locations.—

(1) IN GENERAL.—If a digital service, audio or video programming service, or VoIP service is sold to a customer and available for use by the customer in multiple locations simultaneously, the seller may determine the customer tax addresses using a reasonable and consistent method based on the addresses of use as provided by the customer and determined in agreement with the customer at the time of sale or at a later time.