Internet Sales Tax Fairness - Federal

Senator Michael Enzi (R-WY) introduced the following legislation in 2007 titled the "Sales Tax Fairness and Simplification Act," which would authorize states to enter into an Interstate Sales Tax Compact* and to adopt a streamlined sales tax system.**

Once 10 states representing at least 20 percent of the population in states with sales taxes have joined the Compact, the bill would authorize those states to require companies with more than $5 million in annual gross sales to collect and remit sales taxes on remote sales (i.e., internet and mail order sales).

* Interstate Compacts -- The Constitution (Article I, Section 10) allows states to form interstate compacts, provided that they are approved in identical form by each state involved and then by Congress. Compacts enable participating states to enact policies in a particular area (such as tax collection from out-of-state companies) that would otherwise violate the Constitution's interstate commerce clause. The Northeast Interstate Dairy Compact is one example.

More Information:

• Full Text of the Federal Sales Tax Fairness and Simplification Act - introduced May 2007