Federal and state legislative activity surrounding the internet retail tax remains high. It’s important to understand the legislation — both passed and proposed — that may affect your business.
Click on each state to see what’s going on, or download all activity in chronological order.
Remote Transaction Parity Act
June 15, 2015
The Remote Transaction Parity Act ("RTPA") was introduced to the US House of Representatives, which would allow states to collect taxes on remote and online sales in 45 states and the District of Columbia, whether the retailers have a physical presence within their borders or not. The RTPA offers audit protection for small businesses and a phase-out option: Businesses with annual revenues of less than $10 million will be exempt from the law for the first year; in the second year it will be lowered to $5 million; and $1 million businesses will be exempt for three years. The bill also calls for states to pay for the installation and maintenance cost of the software remote sellers need to collect and remit the taxes due.
Under current federal law, states can only collect sales taxes from out-of-state online retailers if they have a physical presence in the state, such as retail stores or distribution warehouses. The Act must still be approved in the US House of Representatives and the US Senate before becoming law; however, if passed, the RTPA may alleviate qualifying states from having to pass affiliate nexus tax legislation in order to require online retailers to collect and remit sales tax.
June 15, 2015
This information is not tax or legal advice, it does not necessarily represent CJ Affiliate's position(s). It is provided as a courtesy for your convenience. CJ shall not be responsible for the accuracy of such information, especially considering a portion of the information may be provided by third parties. We therefore disclaim all liability and responsibility arising from any reliance placed on such information.
- Legislation Defeated vRecent Internet tax legislation has been overturned by the state's legislators or vetoed by the state's governor.
- Legislation Passed vThe state has passed Internet tax legislation into law, as either a Control Tax and/or a Click-Through Tax. A Control Tax requires that Internet retailers who have a physical presence within the state may be taxed. A Click-Through Tax allows Internet retailers who do not have a physical presence within the state to be taxed if certain requirements are met.
- No Sales Tax vThe state does not charge a tax on any purchases that occur within the state.
- No Recent Legislation vThere is no Internet tax legislation pending in the state's current legislative session.
- Legislation Pending vAn Internet tax bill has been introduced in the state's current legislative session or is awaiting approval before being passed into law.
- Legislation Overturned vInternet tax legislation has been overturned by the state's court and is no longer valid.
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Federal Tax Proposed in 23 states that could potentially end the internet retail tax
Read the PMA's explanation »