SALT Report 3857 – On August 25, 2016, Chairman of the House Ways and Means Committee, Bob Goodlatte released his version of a potential solution to our internet commerce conundrum. The Online Sales Simplification Act (OSSA) contains a unique blended solution using origin based rules and destination based rates for online sellers and purchasers. The tax will be collected and doled out by a central clearinghouse to participating states.
What does that mean? It means that a consumer in California purchasing from an online retailer located in Washington will pay the online retailer a California consumption tax (sales or use) set at a flat rate specific for online sellers determined by Washington rules of taxability. The tax dollars will be collected in Washington and remitted to a federal revenue clearinghouse. The taxes will then be distributed to participating states based on sales volume metrics and reports.
OSSA offers another approach to solving the perennial problem of cross border taxation and enters a decades long effort at figuring out fairness. Along with the Marketplace Fairness Act and the Remote Transactions Parity Act, the Online Sales Simplification Act moves the debate forward.
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