THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY COHEN, CALTAGIRONE, CARROLL, DALEY, DAVIS, GEORGE, JOSEPHS, KORTZ, MUNDY, M. O'BRIEN AND STURLA, JUNE 14, 2011

REFERRED TO COMMITTEE ON FINANCE, JUNE 14, 2011  

AN ACT

Providing for multistate sales and use tax administration for

commerce.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Multistate

Sales and Use Tax Participation Act.

Section 2.  Declaration of policy.

The General Assembly finds and declares as follows:

(1)  A simplified sales and use tax system will reduce

and over time eliminate the burden and cost for all vendors

to collect this State's sales and use tax.

(2)  This Commonwealth should participate in multistate

discussions to negotiate the terms of an agreement to

simplify and modernize sales and use tax administration in

order to substantially reduce the burden of tax compliance

for all sellers and for all types of commerce.

Section 3.  Definitions

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agreement."  The Streamlined Sales and Use Tax Agreement to:

(1)  calculate the tax imposed by each jurisdiction on a

transaction;

(2)  determine the amount of tax to remit to the

appropriate state; and

(3)  maintain a record of the transaction.

"Certified automated system."  Software certified jointly by

the states which are signatories to the agreement.

"Certified service provider."  An agent certified jointly by

the states which are signatories to the agreement to perform all

of the seller's sales tax functions.

"Conforming state."  Any state that adopts the agreement

through legislative action.

"Delegate."  An individual who represents a state in

negotiating the agreement.

"Sales tax."  The tax imposed under section 202(a) of the act

of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971.

"Seller."  A person making sales, leases or rentals of

personal property or services.

"State."  Any state of the United States and the District of

Columbia.

"Use tax."  The tax imposed under section 202(b) of the Tax

Reform Code of 1971.

Section 4.  Delegates.

(a)  Designation of delegates.--For the purposes of

negotiating the agreement the Commonwealth shall enter into

multistate discussions. For purposes of such discussions, the

Commonwealth shall be represented by the following delegates:

(1)  The Governor or a designee.

(2)  The President pro tempore of the Senate or a

designee.

(3)  The Speaker of the House of Representatives or a

designee.

(4)  The Minority Leader of the Senate or a designee.

(5)  The Minority Leader of the House of Representatives

or a designee.

(b)  Voting authority.--The Governor or his designee may vote

on behalf of the Commonwealth on any proposals presented as part

of the multistate discussions. As the voting representative of

the Pennsylvania delegation, the Governor or his designee shall

ensure that all information pertaining to the work of the

agreement and the Streamlined Sales Tax Project, and any

negotiations, meetings or other information pertaining thereto

shall be shared in a timely manner with all delegates identified

in this section.

Section 5.  Authority to negotiate agreement.

(a)  Negotiation.--The delegates may negotiate the agreement

with other states to simplify and modernize sales and use tax

administration in order to substantially reduce the burden of

tax compliance for all sellers and for all types of commerce. In

furtherance of the agreement, the delegates may act jointly with

other states establishing standards for certification of a

certified service provider and certified automated system and

establish performance standards for multistate sellers.

(b)  Related matters.--The delegates may take other actions

reasonably required to implement the provisions of this act.

This subsection includes the promulgation of regulations and the

joint procurement, with other states, of goods and services in

furtherance of the cooperative agreement.

Section 6.  Relationship to State law.

No provision of the agreement shall invalidate or amend any

provision of the laws of this Commonwealth. Implementation of

any condition of the agreement in this Commonwealth must be by

legislative action.

Section 7.  Agreement requirements and prohibitions.

(a)  Requirements.--The delegates, in negotiating the tax

agreement, shall generally abide by the following requirements:

(1)  Simplified rate.--The agreement must set

restrictions to limit over time the number of state rates.

(2)  Uniform standards.--The agreement must establish

uniform standards for the following:

(i)  The sourcing of transactions to taxing

jurisdictions.

(ii)  The administration of exempt sales.

(iii)  Sales and use tax returns and remittances.

(3)  Central registration.--The agreement must provide a

central, electronic registration system which allows a seller

to register to collect and remit sales and use taxes for all

conforming states.

(4)  No nexus attribution.--The agreement must provide

that registration with the central registration system in the

conforming states will not be used as a factor in determining

whether the seller has nexus with a state for any tax.

(5)  Local sales and use taxes.--The agreement must

provide for reduction of the burdens of complying with local

sales and use taxes through the following:

(i)  Restricting variances between the state and

local tax bases.

(ii)  Requiring states to administer any sales and

use taxes levied by local jurisdictions within the state

so that sellers collecting and remitting these taxes will

not have to register or file returns with, remit funds to

or be subject to independent audits from local taxing

jurisdictions.

(iii)  Restricting the frequency of changes in the

local sales and use tax rates and setting effective dates

for the application of local jurisdictional boundary

changes to local sales and use taxes.

(iv)  Providing notice of changes in local sales and

use tax rates and of changes in the boundaries of local

taxing jurisdictions.

(6)  Monetary allowances.--The agreement must outline any

monetary allowances that are to be provided by the states,

including any sales tax discounts offered by the various

states, to sellers or certified service providers. The

agreement must allow for a joint public and private sector

study of the compliance cost on sellers and certified service

providers to collect sales and use taxes for state and local

governments under various levels of complexity to be

completed by July 1, 2012.

(7)  State compliance.--The agreement must require each

state to certify compliance with the terms of the agreement

prior to joining and to maintain compliance, under the laws

of the member state, with all provisions of the agreement

while a member.

(8)  Consumer privacy.--The agreement must require each

state to adopt a uniform policy for certified service

providers which protects the privacy of consumers and

maintains the confidentiality of tax information.

(9)  Advisory councils.--The agreement must provide for

the appointment of an advisory council of private sector

representatives and an advisory council of nonmember state

representatives to consult with in the administration of the

agreement.

(b)  Prohibition.--The agreement shall not:

(1)  Apply to taxes imposed on and measured by net income

derived from the Internet or interactive computer services.

(2)  Apply to fairly apportioned business license taxes

applied to businesses that are doing business in this

Commonwealth.

(3)  Affect the authority of the Commonwealth or its

political subdivisions to impose a tax on other transactions

affected by use of the Internet or interactive computer

services.

Section 8.  Cooperating sovereigns.

The agreement is an accord among individual cooperating

sovereigns in furtherance of their governmental functions. The

agreement provides a mechanism among the member states to

establish and maintain a cooperative, simplified system for the

application and administration of sales and use taxes under the

law of each member state.

Section 9.  Annual report.

The Governor or his designee shall prepare an annual report

of the Commonwealth's participation in the multistate

discussions to simplify and modernize sales and use tax

administration as set forth in this act. The report shall be

transmitted by the second Monday in January of each year that

such discussions are ongoing and shall be provided to the

majority and minority chairmen of the following committees:

(1)  The Appropriations Committee of the Senate.

(2)  The Finance Committee of the Senate.

(3)  The Appropriations Committee of the House of

Representatives.

(4)  The Finance Committee of the House of

Representatives.

Section 10.  Effective date.

This act shall take effect in 60 days.