Last week, the Utah legislature passed both an affiliate nexus bill that will require remote sellers to collect and remit sales tax and a joint resolution urging Congress to pass national, remote-seller legislation.
H.B. 384 expands the obligation on a seller to collect and remit sales tax to remote sellers who “sell tangible personal property, a service or a product transferred electronically for use in the state if:
(1) the seller holds a substantial ownership interest in, or is owned in whole or substantial part, by a related seller, and
(2) the seller sells the same or a substantially similar line of products as the related seller and does so under the same or substantially similar business name, or
(3) the place of business of the related seller or an in-state employee of the related seller is used to advertise, promote, or facilitate sales by the seller to a purchaser.”
Notability, another bill introduced at about the same time as H.B. 384—H.B. 385, a bill that would have required remote sellers to provide notice to Utah purchasers that their purchases may be subject to use tax—died in the House.
Also last week, the legislature passed H.J.R. 14, a joint resolution urging the U.S. Congress to “support equity and sales tax fairness.” The resolution urges Congress to pass “fair and constitutional collection of state sales tax by both in-state and remote sellers.” The legislature hopes that Congress will consider a laundry-list of factors in the enactment of such legislation, including: (1) state provided or state-certified tax collection remittance software that is simple and easy to maintain; (2) immunity form civil liability for retailers using state provided tax collection software; (3) audit accountability to a single state tax audit authority; (4) the elimination of interstate tax complexity through the streamlining of taxable goods categories; (5) adoption of meaningful small business exceptions (so that small online retailers will not be effected); and (6) fair compensation to a tax collecting retailer.
Currently, there are three sales tax nexus bills pending before Congress—the Main Street Fairness Act; the Marketplace Equity Act; and the Marketplace Fairness Act. (Majority Leader Reid has apparently promised Senator Durbin a vote call on the Marketplace Fairness Act if 60 Senators sign on—there are currently 12 co-sponsors.)
Utah’s affiliate nexus legislation will take effect on July 1, 2012.