**Legislation Bans Retroactive Taxation, Creates an Exemption for Small Businesses & Establishes Timeline for Businesses to Adjust to New Regulations**
(Washington, DC)— U.S. Senator Jeanne Shaheen (D-NH), a senior member of the Senate Small Business & Entrepreneurship Committee, reintroduced the Online Sales Simplicity and Small Business Relief Act with Senator Ron Wyden (D-OR), the lead Democrat of the Senate Finance Committee, and Senators Maggie Hassan (D-NH) and Jeff Merkley (D-OR). The bill would stop states with a sales tax from creating red tape for small businesses as a result of the Supreme Court ruling in South Dakota v. Wayfair, Inc. This ruling overturned a previous precedent, and has allowed states to collect sales tax from out-of-state businesses. This new burden hurts small businesses, especially in states like New Hampshire and Oregon which don’t have a sales tax, forcing owners to navigate collecting sales taxes for more than 10,000 taxing jurisdictions across the country.
Specifically, Shaheen’s bill would ban retroactive taxation, preventing states from imposing sales tax collection responsibilities on sellers for any sale that occurred prior to the Wayfair decision. The bill would also create an exemption for small businesses that see less than $10 million a year in total sales. Additionally, the legislation would establish an orderly phase-in of compliance obligations, preventing states from imposing remote sales tax collection duties before January 1, 2021.
“The Wayfair ruling created an unfair tax collection system for our local business owners to manage, which poses serious threats to the sustainability and growth of our small business community,” said Senator Shaheen. “My bill would help cut through the red tape established by the Supreme Court’s decision and provide financial and regulatory relief for our small businesses that are struggling to learn and navigate this new system. I helped defeat this burdensome tax collection requirement when it was before Congress because I knew what this would mean for Granite State businesses. Unfortunately the Supreme Court later got it wrong, so it’s incumbent again on Congress to act and stand up for our local business by providing necessary regulatory reprieve.”
“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. Our bill would prevent small businesses from having to comply with onerous requirements, allowing them to focus on growing and hiring,” said Wyden.
“Right now, other states can force Granite State businesses to comply with the burdensome requirements brought on by the Supreme Court’s backwards Wayfair decision, which has heaped red tape on our small businesses,” Senator Hassan said. “I urge my colleagues to pass this commonsense legislation without delay to protect small businesses from having to implement and navigate an expensive internet sales tax collection system.”
“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,” said Merkley. “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.”
The text of Senator Shaheen’s bill, the Online Sales Simplicity and Small Business Relief Act, is available here.
Shaheen is an outspoken opponent of the online sales tax collection requirement. In January, Shaheen reintroduced the Stop Taxing Our Potential (STOP) Act with Senator Jon Tester (D-MT), legislation that would overturn the Supreme Court ruling in South Dakota v. Wayfair, Inc. Last year, Shaheen and Wyden sent a letter with Senators Merkley and Hassan, urging Senate Leadership to take action before the end of the year to protect small businesses from red tape resulting from the Supreme Court case. Senator Shaheen successfully led efforts in Congress to stop the Marketplace Fairness Act, which was first introduced in 2011 to impose these internet sales tax collection requirements. She previously worked with Senator Wyden and a bipartisan, bicameral group of members of Congress to file an amicus brief in the South Dakota v. Wayfair, Inc. case, in opposition to South Dakota’s argument. The Supreme Court’s dissenting opinion cited a Government Accountability Office report that was requested by Senator Shaheen detailing the burdens that a sales tax collection requirement will place on small businesses. In May of this year, Shaheen was also recognized as a “Small Business Champion” by eBay, which recognized her efforts to fight the burdensome internet sales tax collection requirement.