2016 was yet another active year on the Internet Sales Tax (IST) front in the US. At the Federal level, proponents of both the Marketplace Fairness Act (MFA) and the Remote Transactions Parity Act (RTPA) once again attempted to pass their highly unfair IST bills. And, as we reported to you back in September, a third bill was added to the mix in the form of the Online Sales Simplification Act (OSSA), making the overall IST landscape even more complicated in Congress. Thankfully – due in no small part to Main Street Members making their voice heard via our anti-IST grassroots campaigns throughout the year – Congress did not take up any controversial IST legislation during the current “lame duck” session.
This trend wasn’t limited to the Federal level. Legislation addressing sales tax nexus was a major trend in states across the country in 2016. This year, 42 bills were introduced in 16 states, with litigation initiated in two of those states: South Dakota and Alabama. Both states enacted laws requiring large out-of-state retailers with no physical presence in their states to collect sales tax if they simply sold over a certain dollar amount or had a certain number of transactions into the state. Fortunately, injunctions are in place in both states until the courts rule on the matter.
While we once again prevented the passage of harmful IST legislation at the Federal level, there is still more work to do. We expect more attempts to pass IST legislation in 2017, both at the Federal and State level, with proponents pushing elected officials hard to do so. We will continue to keep you updated and reach out to you should your voice be needed to prevent harmful taxes in key states and at the Federal level in 2017.