Wyden, Merkley bill to spare small biz sales tax red tape

Sens. Ron Wyden and Jeff Merkley have introduced a bill that would prevent new red tape from being imposed as soon as Jan. 1 on small businesses as a result of the Supreme Court ruling in South Dakota v. Wayfair, Inc .

That Supreme Court ruling in June overturned precedent, letting states collect sales tax from out-of-state businesses. The senators said in a news release Friday that this new burden will hurt small businesses, which lack the resources to navigate collecting sales taxes for more than 10,000 taxing jurisdictions across the country.

“Small businesses in Oregon should be focused on making this holiday season their most successful one yet. Instead, owners are living in fear,” Wyden said. “They’re thinking about what jobs they might have to cut because of compliance costs and financial burdens that await their online business in the New Year.

“This bill protects small businesses from cash grabs by out-of-state politicians, bans retroactive tax bills and delays outrageous collection requirements. Action by Congress is the only way to give small businesses more time to prepare for this new and disastrous internet sales tax regime.”

“Small business owners in Oregon should be able to focus on making their businesses a success, not forced to collect a thousand different taxes for other states,” said Merkley. “We need to respect the will of Oregonians, and make sure our small businesses aren’t ringing in the New Year by juggling burdensome new requirements.”

The Online Sales Simplicity and Small Business Relief Act introduced this week 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 also establish an orderly phase-in of compliance obligations, preventing states from imposing remote sales tax collection duties before Jan. 1, 2020.

Joining Wyden and Merkley in introducing the bill are New Hampshire Sens. Jeanne Shaheen and Maggie Hassan. Last month, the four senators sent a letter urging Senate leaders to take action before the end of the year to protect small businesses from red tape resulting from the South Dakota v. Wayfair, Inc. case.

Text of the Online Sales Simplicity and Small Business Relief Act is available here.