Grassley Welcomes Witness Insights on Business Tax Considerations in a ‘Post-Wayfair’ World

Grassley Welcomes Witness Insights on Business Tax Considerations in a 'Post-Wayfair' World

WASHINGTON - Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth, participated in a hearing titled "Providing Small Business Relief from Remote Sales Tax Collection."

Grassley in his opening remarks acknowledged challenges small online retailers have faced since South Dakota v. Wayfair. He additionally discussed Iowa's membership in the StreamlinedSales and Use Tax Agreement and its associated reforms to facilitate compliance with state tax laws.

Click the corresponding links for:

• Transcript of Grassley's opening statement
• Video of Grassley's opening statement
• Video of Grassley's witnesses questioning

Excerpts from Grassley's exchange with hearing witnesses follow.

Lowering Burdens in Non-Streamline States

Grassley: "Since the Wayfair decision, have states that aren't Streamlined members enacted reforms to limit burdens on interstate commerce or taken steps to join Streamlined?"

Craig Johnson, Executive Director, Streamlined Sales Tax Governing Board: "Most states have not done anything specifically, that I am aware of, to remove those undue burdens. Now, they have done what the Supreme Court noted in Wayfair: they did the no retroactive applications, they put in a small seller threshold. But the question is, did they do the third thing, which is, remove the undue burdens or join the Streamlined Sales Tax Governing Board? I think that's the question that still remains, and that's a question the Supreme Court did not answer."

Impact of Simplification Requirements on Retailers Compliance with Sales Taxes

Grassley: "Mr. Johnson, you note that more than 30,000 sellers have registered with Streamlined to collect and remit taxes to members. [... Another witness,] Mr. Bishop-Henchman, notes it is estimated that nearly 50,000 businesses are ignoring their obligation to collect and remit sales taxes and risking getting caught. In your view, would greater adoption of the simplification requirements implemented by Streamlined members increase the compliance rate of retailers with sales tax obligations - in other words, getting at those 50,000?"

Johnson: "As far as whether or not [greater adoption of Streamlined simplification requirements] would improve the compliance, I think the answer is yes, absolutely it would. I think our member states have recognized the simpler you make the laws for sellers to comply with, the greater the voluntary compliance. And you're going to recognize the revenues that are going to come along with it because you're going to make it easy for business to be able to calculate collect and remit the tax."

States Enforcing Pre-Wayfair Laws

Grassley: "Mr. Bishop-Henchman, you noted that multiple states have tried or are attempting to enforce pre-Wayfair laws. They are effectively seeking to retroactively collect sales taxes from retailers that had no legal obligation to collect such taxes at that time. Are individual states generally observing the Supreme Court's recognition of the need for simplification to avoid imposing an 'undue burden' on interstate commerce?"

Joseph Bishop-Henchman, Executive Vice President, National Taxpayers Union Foundation: "Unfortunately, not enough."

Mr. Bishop-Henchman cited litigation as a potential tool in the toolbox to prevent one state from imposing burdens on the rest of the country but said the Supreme Court's National Pork Producers Council v. Ross decision "undercut" that possibility by punting to Congress for a fix.

Grassley: Do you see more states voluntarily adopting simplification measures or becoming Streamlined members as more time passes after the Wayfair decision?

Bishop-Henchman: "At this point, my answer would be no, I don't see states joining unless there's some incentive for them to do so."

-30-

• Print
• Email
• Like
• Tweet