Bill addresses internet sales tax collection

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Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) introduced legislation last week banning retroactive taxation, preventing states from imposing sales tax collection responsibilities on sellers for any sale occurring before the Wayfair decision.

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The Online Sales Simplicity and Small Business Relief Act stems from last year’s Supreme Court ruling in South Dakota v. Wayfair, Inc., which overturned precedent, allowing states to collect sales tax from out-of-state businesses.

“Small businesses in Oregon have been tied up in a sea of red tape since the Supreme Court’s decision in Wayfair allowed other states to require them to collect sales tax on online purchases,” Wyden, ranking Democrat on the Senate Finance Committee, said. “Our bill would prevent small businesses from having to comply with onerous requirements, allowing them to focus on growing and hiring.”

Another feature of the bill is the creation of an exemption for small businesses that see less than $10 million a year in total sales and establish an orderly phase-in of compliance obligations, preventing states from imposing remote sales tax collection duties before Jan. 1, 2021.

“Small business owners in Oregon should be able to focus on making their businesses a success—without facing unnecessary hurdles when it comes to selling their products online,” Merkley said. “We need to respect the will of Oregonians, and make sure our small businesses aren’t forced to navigate thousands of tax jurisdictions in other states.”

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