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E-Fairness: Washington Update Prepared for Streamlined Sales Tax Governing Board (SST) October 2, 2019 2019 Congressional Outlook 2 Fiscal Year 2020 Appropriations Defense Reauthorization Executive and Judicial Nominations Tax Extenders Trade Healthcare Costs/Drug Costs Budget Reform Data Privacy Administration Oversight/Impeachment Potential Threats to Congressional Action 3 Impeachment Fiscal Year 2020 Appropriations Process Congressional Retirements 2020 Elections Senate Finance Committee Current Ratio: 15-13 4 Republicans Democrats Chuck Grassley (IA), Chair (4 C, 6 RM) Ron Wyden (OR), Ranking Mike Crapo (ID) Debbie Stabenow (MI) Pat Roberts (KS) Maria Cantwell (WA) Mike Enzi (WY) Bob Menendez (NJ) John Cornyn (TX) Tom Carper (DE) John Thune (SD) Ben Cardin (MD) Richard Burr (NC) Sherrod Brown (OH) Johnny Isakson (GA) Michael Bennet (CO) Rob Portman (OH) Bob Casey (PA) Pat Toomey (PA) Mark Warner (VA) Tim Scott (SC) Sheldon Whitehouse (RI) Bill Cassidy (LA) Maggie Hassan (NH) James Lankford (OK) Catherine Cortez Masto (NV) Steve Daines (MT) New Committee Member Retiring Committee Member Todd Young (IN) C = Years as Chair of Committee RM = Year as Ranking Member Committee Seniority over Chair/Ranking Member Senate Appropriations Committee Current Ratio: 16-15 5 Republicans Democrats Richard Shelby (AL), Chair (2 C, 2 RM) Patrick Leahy (VT), Ranking Mitch McConnell (KY) Patty Murray (WA) Lamar Alexander (TN) Dianne Feinstein (CA) Susan Collins (ME) Dick Durbin (IL) Lisa Murkowski (AK) Jack Reed (RI) Lindsey Graham (SC) Jon Tester (MT) Roy Blunt (MO) Tom Udall (NM) Jerry Moran (KS) Jeanne Shaheen (NH) John Hoeven (ND) Jeff Merkley (OR) John Boozman (AR) Chris Coons (DE) Shelley Moore Capito (WV) Brian Schatz (HI) John Kennedy (LA) Tammy Baldwin (WI) Cindy Hyde-Smith (MS) Chris Murphy (CT) Steve Daines (MT) Joe Manchin (WV) Marco Rubio (FL) New Committee Member Chris Van Hollen (MD) James Lankford (OK) Retiring Committee Member C = Years as Chair of Committee RM = Year as Ranking Member Committee Seniority over Chair/Ranking Member House Judiciary Committee Current Ratio: 24-17 6 Democrats Republicans Jerry Nadler (NY), Chair Madeleine Dean (PA) Doug Collins (GA), Ranking Zoe Lofgren (CA) Debbie Mucarsel-Powell (FL) Jim Sensenbrenner (WI) Sheila Jackson Lee (TX) Veronica Escobar (TX) Steve Chabot (OH) Steve Cohen (TN) Louie Gohmert (TX) Hank Johnson (GA) Jim Jordan (OH) Ted Deutch (FL) Ken Buck (CO) Karen Bass (CA) John Ratcliffe (TX) Cedric Richmond (LA) Martha Roby (AL) Hakeem Jeffries (NY) Matt Gaetz (FL) David Cicilline (RI) Mike Johnson (LA) Eric Swalwell (CA) Andy Biggs (AZ) Ted Lieu (CA) Tom McClintock (CA) Jamie Raskin (MD) Debbie Lesko (AZ) Pramila Jayapal (WA) Guy Reschenthaler (PA) Val Demings (FL) Ben Cline (VA) Lou Correa (CA) Kelly Armstrong (ND) Mary Gay Scanlon (PA) Greg Steube (FL) Sylvia Garcia (TX) Joe Neguse (CO) Lucy McBath (GA) Greg Stanton (AZ) New Committee Member Retiring Member House Appropriations Committee Current Ratio: 30-23 7 Democrats Republicans Nita Lowey (NY), Chair Mark Pocan (WI) Kay Granger (TX), Chris Stewart (UT) Marcy Kaptur (OH) Katherine Clark (MA) Ranking Steven Palazzo (MS) Pete Visclosky (IN) Pete Aguilar (CA), Vice Hal Rogers (KY) Dan Newhouse (WA) Jose Serrano (NY) Chair Robert Aderholt (AL) John Moolenaar (MI) Rosa DeLauro (CT) Lois Frankel (FL) Mike Simpson (ID) John Rutherford (FL) David Price (NC) Cheri Bustos (IL) John Carter (TX) Will Hurd (TX) Lucille Roybal-Allard (CA) Bonnie Watson Coleman Ken Calvert (CA) Sanford Bishop (GA) (NJ) Tom Cole (OK) Barbara Lee (CA) Brenda Lawrence (MI) Mario Diaz-Balart (FL) Betty McCollum (MN) Norma Torres (CA) Tom Graves (GA) Tim Ryan (OH) Charlie Crist (FL) Steve Womack (AR) C.A. Dutch Ruppersberger (MD) Ann Kirkpatrick (AZ) Jeff Fortenberry (NE) Debbie Wasserman Schultz (FL) Ed Case (HI) Chuck Fleischmann (TN) Henry Cuellar (TX) Jamie Herrera Beutler Chellie Pingree (ME) (WA) Mike Quigley (IL) David Joyce (OH) Derek Kilmer (WA) Andy Harris (MD) Matt Cartwright (PA) Martha Roby (AL) Grace Meng (NY) Mark Amodei (NV) New Committee Member Retiring Member 2020 Democratic Presidential Candidates’ Positions on E-fairness 8 Vice President Joe Biden Senator Elizabeth Warren (D-MA) Cosponsor of The Marketplace Fairness Act Voted yes on May 6, 2013 for Senate passage of the Marketplace Fairness Act Senator Bernie Sanders (D-VT) Voted yes on May 6, 2013 for Senate passage of the Marketplace Fairness Act E-fairness Federal Initiatives 116th Congress: SST E-fairness Legislative Position 10 SST is not advocating for federal e-fairness legislation at this time. Let the states demonstrate that they can and will implement this fairly and in a transparent manner. Critics’ concerns after the announcement of the South Dakota v. Wayfair SCOTUS decision: Retroactivity Small seller exemption levels Implementation dates by the states Creating and implementing new state compacts to streamline sales and use tax systems State overreach 116th Congress: E-fairness Legislative Action 11 Wayfair v. South Dakota SCOTUS decision has not stopped congressional interest in e-fairness. Federal legislative bills introduced in the 116th Congress 4 House bills 2 Senate bills No legislative action taken to date – no committee hearings or floor action Fiscal Year 2020 Appropriations Process Engage with House and Senate members and staff New members of the House and Senate SST states Committees of jurisdiction – House Judiciary Committee and Senate Finance Committee 116th Congress: E-fairness Legislative Action 12 H.R. 379, Protecting Businesses from Burdensome Compliance Cost Act Introduced: January 9, 2019 Sponsor: Rep. Bob Gibbs (R-OH) Cosponsors: 1 Republican (Rep. Greg Gianforte (R-MT)) Committee: House Judiciary Committee SST Position: Oppose Key aspects of the bill: Limit the authority of a state to require remote sellers to collect taxes and fees owed by purchasers Single rate per state Single point of collection per state “Nexus” is referring to physical nexus, not economic nexus 116th Congress: E-fairness Legislative Action 13 S. 128, The Stop Taxing Our Potential (STOP) Act Introduced January 15, 2019 Sponsor: Jon Tester (D-MT) Cosponsors: 4 Democrats (Sens. Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), Maggie Hassan (D-NH), and Ron Wyden (D- OR)) Committee: Senate Finance Committee SST Position: Oppose Key aspects of the bill: Imposes a strict physical nexus standard Overturns the U.S. Supreme Court’s decision (Wayfair v. South Dakota). 116th Congress: E-fairness Legislative Action 14 H.R. 1933, The Online Sales Simplicity and Small Business Relief Act Introduced: March 27, 2019 Sponsor: Jim Sensenbrenner (R-WI) Cosponsors: 12 Cosponsors – 7 Republicans and 5 Democrats Committee: House Judiciary Committee SST Position: Oppose Key aspects of the bill: Prevent retroactive collection (prior to June 21, 2018) Sets a “small business” exemption of $10 million that will be eliminated upon congressional approval of a state compact on simplification Relies on an “physical presence” concept struck down by the Supreme Court in South Dakota v. Wayfair 116th Congress: E-fairness Legislative Action 15 H.R. 3063, The Business Activity Tax Simplification Act Introduced: June 3, 2019 Sponsor: Steve Chabot (R-OH) Cosponsors: 2 Republicans (Reps. John Joyce (R-PA) and Ben Cline (R- VA)) and 1 Democrat (Rep. Bobby Scott (D-VA)) Committee: House Judiciary Committee SST Position: No official position - monitoring Key aspects of the bill: Expands federal prohibition against state taxation of interstate commerce to include taxation of out-of-state transactions involving all forms of property and services, including the furnishing or gathering of information and sales or transactions involving digital goods or services. Prohibits state taxation of an out-of-state entity unless the entity has a physical presence in the taxing state. Sets forth criteria for determining physical presence in a state. Specifies requirements for computing the tax liability of affiliated businesses operating in a state. 116th Congress: E-fairness Legislative Action 16 H.R. 1725/S. 765, The Digital Goods and Services Tax Fairness Act of 2019 Introduced: March 13, 2019 Sponsor: Steve Cohen (D-TN) and John Thune (R-SD) Cosponsors: House – 3 Republicans (Reps. John Ratcliffe (R-TX), Debbie Lesko (R-AZ), and Bill Flores (R-TX)) Senate – 1 Democrat (Sen. Ron Wyden (D-OR)) Committee: House Judiciary Committee and Senate Finance Committee SST Position: No official position – monitoring Key aspects of the bill: Prohibits a state or local jurisdiction from imposing (1) multiple taxes on the sale of a covered electronic good or service, or (2) discriminatory taxes on the sale or use of a digital good or service. Specifies services that are excluded from the definition of "digital service." Restricts taxation of a covered electronic good or service to taxation by a state or local jurisdiction whose territorial limits encompass a customer tax address, as defined by this bill. Looking Forward SST Action Items 18 State implementation Congressional and Administration education Champions development Questions / Comments Randi Reid Kountoupes Denham Carr & Reid 607 14th Street, NW Suite 750 Washington, DC 20005 (202) 803-4585 [email protected] www.kdcrpartners.com.
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