All States ~ Sales and Use Tax: Goodlatte Releases Updated Online Sales Tax Discussion Draft

CCH Tax Day Report

House Judiciary Committee Chairman Robert Goodlatte, R-Va., a longtime participant in the online sales tax debate, released his latest discussion draft on August 25. He circulated an earlier version in 2015. The updated discussion draft applies origin-based sourcing rules for remote sales.

“The draft flows from two key principles: Simplicity, particularly for small businesses, and No Regulation without Representation,” a House Judiciary aide told Wolters Kluwer. “The draft is designed to level the playing field for traditional retailers, while keeping compliance simple for online sellers and ensuring states can collect sales taxes that are already due.”

Origin State

The discussion draft authorizes a state to collect tax on the sales of a remote seller if the state is the “origin state,” among other factors. Origin state status is determined by where the seller has physical presence.

The draft defines physical presence by sellers who maintain a lease or ownership of property in a given state and have one or more employees or independent contractors present in the state who engage in “specific” solicitation or provide on-site services.

The House returns from its summer recess on September 6. According to a House Judiciary aide, the Committee has already circulated the draft legislation to Committee members and relevant stakeholders.

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