Transcript RTPA vs. OSSA – Purchaser’s Perspective Will purchasers be subject to new taxes? RTPA (Chaffetz) OSSA (Goodlatte) No.

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RTPA vs. OSSA – Purchaser’s Perspective
Will purchasers be subject to new taxes?
RTPA (Chaffetz)
OSSA (Goodlatte)
No. Under the RTPA states are
just being given the authority
to require remote sellers to
collect the use tax that
purchasers already legally
owe.
Yes. Purchasers in non-sales tax
states will be required to pay
sales taxes to remote sellers
located in participating sales
tax states (today these
purchasers legally owe no sales
tax on these transactions).
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11/7/2015
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11/7/2015
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RTPA vs. OSSA – Purchaser’s Perspective
If a remote seller does not collect the proper
amount of tax due to the destination state at
the time of the sale, are individual purchasers
still generally required to pay the use tax?
RTPA (Chaffetz)
OSSA (Goodlatte)
Yes. The tax is still legally due
and owing.
No. If the purchaser paid a tax
collected by the remote seller,
the destination state may not
impose any additional tax.
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RTPA vs. OSSA – Purchaser’s Perspective
Will purchasers be subject to different
exemptions based on the location of the
remote seller?
RTPA (Chaffetz)
No. The same exemptions
will apply regardless of the
location of the seller.
OSSA (Goodlatte)
Yes. Remote sellers will apply
the exemptions that are based
on their origin state.
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RTPA vs. OSSA – Purchaser’s Perspective
Will the same purchaser be subject to different
rates on purchases of the same product from
different remote sellers?
RTPA (Chaffetz)
No. The same destination
rate will apply regardless of
where the remote seller is
located.
OSSA (Goodlatte)
Yes. Remote sellers will apply
the rate based on their origin
state.
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Other OSSA Concerns – Purchaser’s
Perspective
 Personal information provided to clearinghouse
 Refunds – which state has jurisdiction and who does
purchaser go to for refunds?
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RTPA vs. OSSA – Retailer’s Perspective
Will the same sourcing rules apply to all
transactions?
RTPA (Chaffetz)
OSSA (Goodlatte)
Yes. The same destinationbased sourcing hierarchy will
apply to all transactions.
No. Origin-based sourcing rules
will apply to remote sales but
the destination-based hierarchy
will apply to non-remote sales.
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RTPA vs. OSSA – Retailer’s Perspective
Are retailers provided any protections if sales
tax is not properly charged?
RTPA (Chaffetz)
OSSA (Goodlatte)
Yes. For sellers that use a CSP
the CSP is generally liable for
errors made in calculating
and collecting the tax.
No protections are provided for
failing to collect the proper tax.
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RTPA vs. OSSA – Retailer’s Perspective
Is the tax on a remote sale based on a single
state’s tax base?
RTPA (Chaffetz)
Yes. The tax is generally
based on the destination
state’s laws and rules.
OSSA (Goodlatte)
No. The tax is generally based on
the origin state’s laws and rules but
could be modified by the
exemptions in the destination state
for which there is a “compliant
purchaser certificate”.
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RTPA vs. OSSA – Retailer’s Perspective
Do all remote sellers collect the same amount
of tax on a transaction with the same
purchaser regardless of which state the remote
seller is located?
RTPA (Chaffetz)
Yes. The tax is generally
based on the destination
state’s laws and rules
regardless of where the
remote seller is located.
OSSA (Goodlatte)
No. The tax is generally based
on the origin state’s laws and
rules.
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RTPA vs. OSSA – Retailer’s Perspective
Are remote sales subject to a single rate per
state?
RTPA (Chaffetz)
No – but sellers are provided
the option to use CSPs at no
charge to calculate, collect
and remit in those states
whether they are a “remote
seller.”
OSSA (Goodlatte)
No. Remote sellers apply the rate of
the origin state plus the rate of the
origin locality. Different remote
sellers within a state may be
charging different rates depending
on their origin locality.
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RTPA vs. OSSA – Retailer’s Perspective
Are remote sellers provided software or other
help to comply with this proposal?
RTPA (Chaffetz)
OSSA (Goodlatte)
Yes. Sellers are provided free
access to use CSPs to
calculate, collect and remit in
those states whether they are
a “remote seller.”
No. Sellers must take care of the
additional reporting requirements,
and gathering and maintaining the
additional information necessary
to prove which sales are remote
sales on their own.
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Other OSSA Concerns – Retailer’s
Perspective
 Does not result in parity at point of sale
 Advantage for remote sellers in non-participating
states
 Destination rules apply to some transactions and
origin rules apply to other transactions
 “Origin state” can change every year
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RTPA vs. OSSA – State’s Perspective
Does the amount of tax legally due on a
remote sale remain the same before and after
the legislation?
RTPA (Chaffetz)
OSSA (Goodlatte)
Yes. States are just being given
the authority to require
remote sellers to collect the
tax at the time of the sale.
No. In many cases, purchasers will be
required to pay more tax than they owe
today. In other cases it will be less, which
means the state will lose those revenues.
Purchasers will figure out who to make
their purchases from to legally reduce the
taxes they owe.
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RTPA vs. OSSA – State’s Perspective
Does the state receiving the tax revenue
determine the taxability of goods and services?
RTPA (Chaffetz)
Yes. The destination state
determines the taxability of
the goods and services.
OSSA (Goodlatte)
No. The origin state determines
the taxability, but the
destination state receives the
revenue.
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RTPA vs. OSSA – State’s Perspective
Does the state receiving the tax revenue set
the tax rates?
RTPA (Chaffetz)
Yes. The tax rate is based on
the destination states laws.
OSSA (Goodlatte)
No. The origin state determines
the tax rate.
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RTPA vs. OSSA – State’s Perspective
Can states keep the existing structure of their
sales and use tax imposition provisions?
RTPA (Chaffetz)
Yes.
OSSA (Goodlatte)
Not all. Some states will need
to change their imposition
statutes to impose the tax on
the seller rather than on the
purchaser.
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RTPA vs. OSSA – State’s Perspective
Do the state's remote sellers compete under
the same tax rules as non-remote sellers after
the legislation?
RTPA (Chaffetz)
Yes. All sellers would be
required to collect tax based
on the destination state’s
laws.
OSSA (Goodlatte)
No. Only remote sellers located in
participating states and non-sales
tax states would be required to
collect and remit the tax (or
provide other information).
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RTPA vs. OSSA – State’s Perspective
Does the legislation discourage the formation
of tax haven states?
RTPA (Chaffetz)
Yes. All sellers would be
required to collect tax based
on the destination state’s laws
regardless of where the seller
is located.
OSSA (Goodlatte)
No. Non-participating states
and states with very low tax
rates will likely attract remote
sellers from other states.
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RTPA vs. OSSA – State’s Perspective
Can states audit remote sellers that are
fraudulently failing to collect the proper sales
tax for their respective states?
RTPA (Chaffetz)
Yes. States can pursue remote
sellers that are fraudulently
failing to collect their tax.
OSSA (Goodlatte)
No. Only the origin state can
pursue the fraudulent sellers.
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Other OSSA Concerns – State’s Perspective
 Participating states putting own state’s remote sellers
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at competitive disadvantage compared to remote
sellers located in non-participating states
Tracking of tax by zip code (about 43,000) and then
having to redistribute to clearinghouse
How to distribute portion of receipts received from
clearinghouse to local governmental units
NOMAD states have to implement system
NOMAD purchasers now required to pay sales tax
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Other OSSA Concerns – State’s Perspective
 Definition of “physical presence”
 Additional resources to process “compliant purchaser”
applications
 Auditing in-state remote sellers for other states
 Personal information required to be retained by
clearinghouse
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