Despite a strong last minute effort, Rep. Kristi Noem (R-SD) did not succeed in getting her Remote Transactions Parity Act (RTP) into the omnibus package passed today by the House and expected to be passed by the Senate by Friday. As TFG noted previously, this was not unforeseen. The House remains divided not only on how to address the online sales tax issue, but also if it needs to be addressed at all. A not insignificant portion of conservative members believe that bills like the RTP are tax increases in disguise. Additionally, House Judiciary Chairman Bob Goodlatte (R-VA), whose committee has jurisdiction over the issue, opposes approaches like Noem’s and that of the Marketplace Fairness Act. Goodlatte has shared a draft of his own bill, which uses origin-based-sourcing, an approach in which taxes from internet sales are collected based on the address of the retailer rather than the consumer, but has done nothing further.
Congress’ inability to address the issue leaves the ball in the Supreme Court’s court. They are expected to hear arguments in South Dakota vs. Wayfair next month and issue a ruling before their term ends in June. While the Supreme Court is expected to overturn their 1992 decision in Quill v. North Dakota, what they will put in its place remains very much an unknown.

TFG will continue to monitor the issue.  If you would like more information, please contact our team.