On September 13, 2018, a bill was introduced in the U.S. House of Representatives “to prohibit States from retroactively imposing a sales tax collection duty on a remote seller,” among other purposes. H.R. 6824, also called the Online Sales Simplicity and Small Business Relief Act of 2018, seeks to limit the impact of the recent Wayfair decision, which eliminated the need for a business to be physically present in a state in order to have economic nexus in that state.
Additionally, H.R. 6824 prohibits Wayfair from applying to small businesses (with less than $10,000,000 in sales in the U.S.) until states develop and Congress approves an interstate compact regarding the imposition of sales tax collection on remote sellers. This small business exception could effectively exempt small sellers with no physical presence in a state from sales tax requirements.
We recently discussed the implications of the Wayfair decision here and here. However, this new House bill may cause a delay in the application of imminent state sales tax rules for remote sellers. Its main goal appears to be to bar the retroactive application of the law upon sales that occurred prior to Wayfair, as well as to limit any negative effects remote sales tax regulations may have on small business owners.
You can monitor the progress of H.R. 6824 here. We will continue to provide updates as the issue develops.
