AN
ACT Relating to authorizing the simplified sales and use tax administration
act; adding a new chapter to Title 82 RCW; providing an effective date; and
providing a contingent effective date.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. This
chapter shall be known and cited as the "simplified sales and use tax
administration act."
NEW
SECTION. Sec. 2. The
definitions in this section apply throughout this chapter unless the context
clearly requires otherwise.
(1)
"Agreement" means the streamlined sales and use tax agreement as
adopted.
(2)
"Certified automated system" means software certified jointly by the
states that are signatories to the agreement to calculate the tax imposed by
each jurisdiction on a transaction, determine the amount of tax to remit to the
appropriate state, and maintain a record of the transaction.
(3)
"Certified service provider" means an agent certified jointly by the
states that are signatories to the agreement to perform all of the seller's
sales tax functions.
(4)
"Person" means an individual, trust, estate, fiduciary, partnership,
limited liability company, limited liability partnership, corporation, or any
other legal entity.
(5)
"Sales tax" means the tax levied under chapter 82.08 RCW.
(6)
"Seller" means any person making sales, leases, or rentals of
personal property or services.
(7)
"State" means any state of the United States and the District of
Columbia.
(8)
"Use tax" means the tax levied under chapter 82.12 RCW.
NEW
SECTION. Sec. 3. The
legislature finds that a simplified sales and use tax system will reduce and
over time eliminate the burden and cost for all vendors to collect this state's
sales and use tax. The legislature further finds that this state should
participate in multistate discussions to review or amend the terms of the
agreement to simplify and modernize sales and use tax administration in order
to substantially reduce the burden of tax compliance for all sellers and for
all types of commerce.
NEW
SECTION. Sec. 4. (1)
For the purposes of reviewing or amending the agreement embodying the
simplification requirements in section 7 of this act, the state shall enter
into multistate discussions. For purposes of these discussions, the state
shall be represented by the department. The governor may appoint up to four
persons to consult with the department at these discussions. The persons
advising the department shall not be compensated and are not entitled to
payment of travel expenses by the state.
(2)
The department shall regularly consult with an advisory group composed of one
member from each of the two largest caucuses of the senate, appointed by the
majority and minority leaders of the senate; one member from each of the two
largest caucuses of the house of representatives, appointed by the speaker and
minority leader of the house of representatives; representatives of retailers,
including those selling via mail, telephone, and the internet; representatives
of large and small businesses; and representatives of counties and cities. The
department shall use its best efforts to consult with the advisory group before
any multistate discussions in which it is anticipated that amendments may be
proposed to the agreement embodying the simplification requirements in section
7 of this act.
NEW
SECTION. Sec. 5. The
department shall enter into the streamlined sales and use tax agreement with one
or more states to simplify and modernize sales and use tax administration in
order to substantially reduce the burden of tax compliance for all sellers and
for all types of commerce. In furtherance of the agreement, the department may
act jointly with other states that are members of the agreement to establish
standards for certification of a certified service provider and certified
automated system and establish performance standards for multistate sellers.
The department is further authorized to take other actions reasonably required
to implement this chapter. Other actions authorized by this section include,
but are not limited to, the adoption of rules and the joint procurement, with
other member states, of goods and services in furtherance of the cooperative
agreement. The department, or the department's designee, may represent this
state before the other states that are signatories to the agreement.
NEW
SECTION. Sec. 6. No
provision of the agreement authorized by this chapter in whole or part
invalidates or amends any provision of the law of this state. Adoption of the
agreement by this state does not amend or modify any law of this state.
Implementation of any condition of the agreement in this state, whether adopted
before, at, or after membership of this state in the agreement, must be by the
action of this state.
NEW
SECTION. Sec. 7. The
department shall not enter into the streamlined sales and use tax agreement
unless the agreement requires each state to abide by the requirements in this
section.
(1)
The agreement must set restrictions to limit over time the number of state
rates.
(2)
The agreement must establish uniform standards for:
(a)
The sourcing of transactions to taxing jurisdictions;
(b)
The administration of exempt sales; and
(c)
Sales and use tax returns and remittances.
(3)
The agreement must provide a central, electronic registration system that
allows a seller to register to collect and remit sales and use taxes for all
signatory states.
(4)
The agreement must provide that registration with the central registration
system and the collection of sales and use taxes in the signatory states will
not be used as a factor in determining whether the seller has nexus with a
state for any tax.
(5)
The agreement must provide for reduction of the burdens of complying with local
sales and use taxes by:
(a)
Restricting variances between the state and local tax bases;
(b)
Requiring states to administer any sales and use taxes levied by local
jurisdictions within the state so that sellers collecting and remitting these
taxes will not have to register or file returns with, remit funds to, or be
subject to independent audits from local taxing jurisdictions;
(c)
Restricting the frequency of changes in the local sales and use tax rates and
setting effective dates for the application of local jurisdictional boundary
changes to local sales and use taxes; and
(d)
Providing notice of changes in local sales and use tax rates and of changes in
the boundaries of local taxing jurisdictions.
(6)
The agreement must outline any monetary allowances that are to be provided by
the states to sellers or certified service providers. The agreement must allow
for a joint public and private sector study of the compliance cost on sellers
and certified service providers to collect sales and use taxes for state and
local governments under various levels of complexity to be completed by July 1,
2002.
(7)
The agreement must require each state to certify compliance with the terms of
the agreement before joining and to maintain compliance, under the laws of the
member state, with all provisions of the agreement while a member.
(8)
The agreement must require each state to adopt a uniform policy for certified
service providers that protects the privacy of consumers and maintains the
confidentiality of tax information.
(9)
The agreement must provide for the appointment of an advisory council of
private sector representatives and an advisory council of nonmember state
representatives to consult with in the administration of the agreement.
NEW
SECTION. Sec. 8. The
agreement authorized by this chapter is an accord among individual cooperating
sovereigns in furtherance of their governmental functions. The agreement
provides a mechanism among the member states to establish and maintain a
cooperative, simplified system for the application and administration of sales
and use taxes under the duly adopted law of each member state.
NEW
SECTION. Sec. 9. (1)
The agreement authorized by this chapter binds and inures only to the benefit
of this state and the other member states. No person, other than a member
state, is an intended beneficiary of the agreement. Any benefit to a person
other than a state is established by the law of this state and the other member
states and not by the terms of the agreement.
(2)
Consistent with subsection (1) of this section, no person has any cause of
action or defense under the agreement or by virtue of this state's approval of
the agreement. No person may challenge, in any action brought under any
provision of law, any action or inaction by any department, agency, other
instrumentality of this state, or any political subdivision of this state on
the ground that the action or inaction is inconsistent with the agreement.
(3)
No law of this state, or the application thereof, may be declared invalid as to
any person or circumstance on the ground that the provision or application is
inconsistent with the agreement.
NEW
SECTION. Sec. 10. (1) A
certified service provider is the agent of a seller, with whom the certified
service provider has contracted, for the collection and remittance of sales and
use taxes. As the seller's agent, the certified service provider is liable for
sales and use tax due each member state on all sales transactions it processes
for the seller except as set out in this section. A seller that contracts with
a certified service provider is not liable to the state for sales or use tax
due on transactions processed by the certified service provider unless the
seller misrepresented the type of items it sells or committed fraud. In the
absence of probable cause to believe that the seller has committed fraud or
made a material misrepresentation, the seller is not subject to audit on the
transactions processed by the certified service provider. A seller is subject
to audit for transactions not processed by the certified service provider. The
member states acting jointly may perform a system check of the seller and
review the seller's procedures to determine if the certified service provider's
system is functioning properly and the extent to which the seller's
transactions are being processed by the certified service provider.
(2)
A person that provides a certified automated system is responsible for the
proper functioning of that system and is liable to the state for underpayments
of tax attributable to errors in the functioning of the certified automated
system. A seller that uses a certified automated system remains responsible
and is liable to the state for reporting and remitting tax.
(3)
A seller that has a proprietary system for determining the amount of tax due on
transactions and has signed an agreement establishing a performance standard
for that system is liable for the failure of the system to meet the performance
standard.
NEW
SECTION. Sec. 11. Upon
becoming a member of the streamlined sales and use tax agreement, the
department shall prepare legislation conforming state law as necessary and
shall provide such legislation to the fiscal committees of the legislature.
NEW
SECTION. Sec. 12.
Sections 1 through 9 of this act take effect July 1, 2002.
NEW
SECTION. Sec. 13.
Sections 10 and 11 of this act become effective when the state becomes a member
of the streamlined sales and use tax agreement.
NEW
SECTION. Sec. 14.
Sections 1 through 12 of this act constitute a new chapter in Title 82 RCW.
