August 01, 2019

Wyden, Merkley Reintroduce Bill to Protect Small Businesses From Burdensome Internet Sales Tax Collection Requirement

Washington, D.C. – U.S. Sens. Ron Wyden and Jeff Merkley this week reintroduced legislation that would stop states with a sales tax from creating red tape for small businesses as a result of last year’s Supreme Court ruling in South Dakota v. Wayfair, Inc.

“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,” said Wyden, ranking Democrat on the Senate Finance Committee. “Our bill would prevent small businesses from having to comply with onerous requirements, allowing them to focus on growing and hiring.”

“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 Supreme Court’s Wayfair ruling overturned precedent, allowing states to collect sales tax from out-of-state businesses. This new burden hurts small businesses, especially in states like Oregon that don’t have a sales tax, forcing owners to navigate collecting sales taxes for more than 10,000 taxing jurisdictions across the country.

The Online Sales Simplicity and Small Business Relief Act 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.

In addition to Wyden and Merkley, other bill co-sponsors are U.S. Sens. Jeanne Shaheen and Maggie Hassan (both D-NH).

Text of the bill is available here.