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Over the last number of years, Internet retailers have been under pressure by the states to collect and remit sales taxes from their customers. As a result, there has been an assortment of statutes enacted and agreements reached with the retailers, especially Amazon, to satisfy the need of the states for additional revenues and the retailers need for simplicity and consistency.

In an effort to make sense of the requirements of some states which have tried to tax the Internet retailers and those who have not yet entered the fray, Congress has proposed several pieces of Legislation. In the 112th Session of Congress, three pieces of legislation were introduced, referred to committees and died there on January 2, 2013, the end of the 112th Session. Taking comments from these initial bills, the 113th Session of Congress, which started January 3, 2013, saw identical bills titled Marketplace Fairness Act of 2013 introduced on February 14, 2013, in the House of Representatives (H.R. 684) and the Senate (S.B. 336). These bills grant authority to the states to adopt the provisions for taxing remote sales.

These bills are often referred to as "Internet retailer" bills in the media. However, that phrase does not appear in the bills. The language in the bills authorizes the states to require remote sellers to collect and remit sales taxes. A "remote seller" sells into a state in which the seller would normally not have any legal responsibility to collect and remit taxes. This would appear to apply to any company who delivers into a state in which it does not have nexus. There is no qualification that a remote seller is an Internet retailer.

The bills also provide that enactment would not create any new nexus between an entity and a state or local jurisdiction. If a state enacts legislation to comply with the federal provisions of the bills, then the sale is sourced first of all to the point where the purchaser receives the item; if delivery is not known, then to the address known or provided to the seller; finally, if the point of delivery and the purchaser address are unknown, the sale is sourced to the seller address. While this does not create nexus, the seller is placed under the taxing authority of the state. The state would not be required to prove nexus and the seller would not have to establish nexus to be placed under the authority of the state. In effect, the idea of nexus for sales tax purposes as laid out in past Court cases and legislation would no longer be required for the state to exercise its taxing authority over remote sellers.

The bills do grant the authority to the states to establish a minimum amount of revenues before a remote seller is subject to any provisions for sales taxes. That amount is $1,000,000 of annual remote sales in the United States in the preceding calendar year before a state can impose sales taxes on a remote seller. Both bills have a number of sponsors. The bills are currently in committees in the respective houses of Congress. However, the Senate has included a reference to its S.B. 336 in the 2013 Budget Resolution indicating support for the measure. The proposed legislation has considerable support among the states, Internet retailers and various business groups. The bills bear watching as the 113th Session of Congress continues.

5/20 Spy the Lie: An evening with Phil Houston, co-author of New York Times bestselling book by former CIA officers that teaches how to detect deception

Phil Houston is a nationally recognized authority on deception detection, critical interviewing, and elicitation. His 25-year career with the Central Intelligence Agency was highlighted by his service as a senior member of the Office of Security and a polygraph expert. Phil introduced his unique methodology for detection of deception to the corporate world with the co-founding of Business Intelligence Advisors, where he served as Executive Vice President and worked with the company's largest clients in the U.S. and abroad.

Hosted and sponsored by UHY LLP and ACG Detroit. Registration and refreshments start at 5:30PM. Program at 6. Reception at 7. Pre-registration is required. Cocktail afterglow with hors d'oeuvres provided. Space is limited. Multiple registrations welcome. Contact Sharon Kimble at acgdetroit@comcast.net or 887 894 2754 to register.

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Save the date! More UHY events are just around the corner...

6/22 Eighteenth Annual Dan McCarty Golf Classic (D.M.G.C.)

7/27 Seventh Annual Cruisin' For Charity Car Show