,,ii  #aacth ,,congress  #ast ,session  
,s4 #acfd  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,july #be1     
#bjac ,mr4 ,wyden 7for himself and ,mr4 
,thune7 introduced the following bill2  
which was read twice and referred to the
 ,committee on ,finance  ,a ,,bill  ,to 
promote neutrality1 simplicity1 and     
fairness in the taxation of digital     
goods and digital services4  #a4 ,short 
title ,this ,act may be cited as the    
,digital ,goods and ,services ,tax      
,fairness ,act of #bjac4  #b4 ,multiple 
and discriminatory taxes prohibited ,no 
,state or local jurisdiction shall      
impose multiple or discriminatory taxes 
on the sale or use of a digital good or 
a digital service4  #c4 ,sourcing       
limitation ,subject to section #f7;a71  
taxes on the sale of a digital good or a
 digital service may only be imposed by 
a ,state or local jurisdiction whose    
territorial limits encompass the        
customer tax address4  #d4 ,customer tax
 address  7a7 ,seller obligation  7#a7  

,in general ,subject to subsection      
7e77#b71 a seller shall be responsible  
for obtaining and maintaining in the    
ordinary course of business the customer
 tax address with respect to the sale of
 a digital good or a digital service1   
and shall be responsible for collecting 
and remitting the correct amount of tax 
for the ,state and local jurisdictions  
whose territorial limits encompass the  
customer tax address if the ,state has  
the authority to require such collection
 and remittance by the seller4  7#b7    
,certain transactions ,when a customer  
tax address is not a business location  
of the seller under clause 7i7 of       
section #g7b77;,a7--  7,a7 if the sale  
is a separate and discrete transaction1 
then a seller shall use reasonable      
efforts to obtain a customer tax        
address1 as such efforts are described  
in clauses 7iii71 7iv71 and 7v7 of      
section #g7b77;,a71 before resorting to 
using a customer tax address as         
determined by clause 7vi7 of such       

section #g7b77;,a72 and  7,b7 if the    
sale is not a separate and discrete     
transaction1 then a seller shall use    
reasonable efforts to obtain a customer 
tax address1 as such efforts are        
described in clauses 7ii71 7iii71 7iv71 
and 7v7 of section #g7b77;,a71 before   
resorting to using a customer tax       
address as determined by clause 7vi7 of 
such section #g7b77;,a74  7b7 ,reliance 
on customer-,povided information ,a     
seller that relies in good faith on     
information provided by a customer to   
determine a customer tax address shall  
not be held liable for any additional   
tax based on a different determination  
of that customer tax address by a ,state
 or local jurisdiction or court of      
competent jurisdiction1 except if and   
until binding notice is given as        
provided in subsection 7c74  7c7        
,address correction ,if a ,state or     
local jurisdiction is authorized under  
,state law to administer a tax1 and the 
jurisdiction determines that the        

customer tax address determined by a    
seller is not the customer tax address  
that would have been determined under   
section #g7b77;,a7 if the seller had the
 additional information provided by the 
,state or local jurisdiction1 then the  
jurisdiction may give binding notice to 
the seller to correct the customer tax  
address on a prospective basis1         
effective not less than #de days after  
the date of such notice1 if--  7#a7 when
 the determination is made by a local   
jurisdiction1 such local jurisdiction   
obtains the consent of all affected     
local jurisdictions within the ,state   
before giving such notice of            
determination2 and  7#b7 before the     
,state or local jurisdiction gives such 
notice of determination1 the customer is
 given an opportunity to demonstrate in 
accordance with applicable ,state or    
local tax administrative procedures that
 the address used is the customer tax   
address4  7d7 ,coordination with        
sourcing of mobile telecommunications   

service  7#a7 ,in general ,if--  7,a7 a 
digital good or a digital service is    
sold to a customer by a home service    
provider of mobile telecommunications   
service that is subject to being sourced
 under section #aag of title #d1 ,united
 ,states ,code1 or the charges for a    
digital good or a digital service are   
billed to the customer by such a home   
service provider2 and  7,b7 the digital 
good or digital service is delivered1   
transferred1 or provided electronically 
by means of mobile telecommunications   
service that is deemed to be provided by
 such home service provider under       
section #aag of such title1  then the   
home service provider and1 if different1
 the seller of the digital good or      
digital service1 may presume that the   
customer's place of primary use for such
 mobile telecommunications service is   
the customer tax address described in   
section #g7b77;,b7 with respect to the  
sale of such digital good or digital    
service4  7#b7 ,definitions ,for        

purposes of this subsection1 the terms  
home service provider1 mobile           
telecommunications service1 and place of
 primary use have the same meanings as  
in section #abd of title #d1 ,united    
,states ,code4  7e7 ,multiple locations 
7#a7 ,in general ,if a digital good or a
 digital service is sold to a customer  
and available for use by the customer in
 multiple locations simultaneously1 the 
seller may determine the customer tax   
addresses using a reasonable and        
consistent method based on the addresses
 of use as provided by the customer and 
determined in agreement with the        
customer at the time of sale4  7#b7     
,direct customer payment  7,a7          
,establishment of direct payment        
procedures ,each ,state and local       
jurisdiction shall provide reasonable   
procedures that permit the direct       
payment by a qualified customer1 as     
determined under procedures established 
by the ,state or local jurisdiction1 of 
taxes that are on the sale of digital   

goods and digital services to multiple  
locations of the customer and that      
would1 absent such procedures1 be       
required or permitted by law to be      
collected from the customer by the      
seller4  7,b7 ,effect of customer       
compliance with direct payment          
procedures ,when a qualified customer   
elects to pay tax directly under the    
procedures established under            
subparagraph 7,a71 the seller shall--   
7i7 have no obligation to obtain the    
multiple customer tax addresses under   
subsection 7a72 and  7ii7 not be liable 
for such tax1 provided the seller       
follows the ,state and local procedures 
and maintains appropriate documentation 
in its books and records4  #e4          
,treatment of bundled transactions and  
digital codes  7a7 ,bundled transaction 
,if a charge for a distinct and         
identifiable digital good or a digital  
service is aggregated with and not      
separately stated from one or more      
charges for other distinct and          

identifiable goods or services1 which   
may include other digital goods or      
digital services1 and any part of the   
aggregation is subject to taxation1 then
 the entire aggregation may be subject  
to taxation1 except to the extent that  
the seller can identify1 by reasonable  
and verifiable standards1 one or more   
charges for the nontaxable goods or     
services from its books and records kept
 in the ordinary course of business4    
7b7 ,digital code ,the tax treatment of 
the sale of a digital code shall be the 
same as the tax treatment of the sale of
 the digital good or digital service to 
which the digital code relates4  7c7    
,rule of construction ,the sale of a    
digital code shall be considered the    
sale transaction for purposes of this   
,act4  #f4 ,no inference  7a7 ,customer 
liability ,subject to the prohibition   
provided in section #b1 nothing in this 
,act modifies1 impairs1 supersedes1 or  
authorizes the modification1 impairment1
 or supersession of any law allowing a  

,state or local jurisdiction to impose  
tax on and collect tax directly from a  
customer based upon use of a digital    
good or digital service in such ,state4 
7b7 ,non-,tax matters ,this ,act shall  
not be construed to apply in1 or to     
affect1 any non-tax regulatory matter or
 other context4  7c7 ,state tax matters 
,the definitions contained in this ,act 
are intended to be used with respect to 
interpreting this ,act4 ,nothing in this
 ,act shall prohibit a ,state or local  
jurisdiction from adopting different    
nomenclature to enforce the provisions  
set forth in this ,act4  #g4            
,definitions ,in this ,act1 the         
following definitions shall apply3  7#a7
 ,customer ,the term customer means a   
person that purchases a digital good1   
digital service1 or digital code4  7#b7 
,customer tax address  7,a7 ,in general 
,the term customer tax address means--  
7i7 with respect to the sale of a       
digital good or digital service that is 
received by the customer at a business  

location of the seller1 such business   
location2  7ii7 if clause 7i7 does not  
apply and the primary use location of   
the digital good or digital service is  
known by the seller1 such location2     
7iii7 if neither clause 7i7 nor clause  
7ii7 applies1 and if the location where 
the digital good or digital service is  
received by the customer1 or by a donee 
of the customer that is identified by   
such customer1 is known to the seller   
and maintained in the ordinary course of
 the seller's business1 such location2  
7iv7 if none of clauses 7i7 through     
7iii7 applies1 the location indicated by
 an address for the customer that is    
available from the business records of  
the seller that are maintained in the   
ordinary course of the seller's         
business1 when use of the address does  
not constitute bad faith2  7v7 if none  
of clauses 7i7 through 7iv7 applies1 the
 location indicated by an address for   
the customer obtained during the        
consummation of the sale1 including the 

address of a customer's payment         
instrument1 when use of this address    
does not constitute bad faith2 or  7vi7 
if none of clauses 7i7 through 7v7      
applies1 including the circumstance in  
which the seller is without sufficient  
information to apply such paragraphs1   
the location from which the digital good
 was first available for transmission by
 the seller 7disregarding for these     
purposes any location that merely       
provides for the digital transfer of the
 product sold71 or from which the       
digital service was provided by the     
seller4  7,b7 ,exclusion ,for purposes  
of this paragraph1 the term location    
does not include the location of a      
server1 machine1 or device1 including an
 intermediary server1 that is used      
simply for routing or storage4  7#c7    
,delivered or transferred               
electronically2 provided electronically 
,the term delivered or transferred      
electronically means the delivery or    
transfer by means other than tangible   

storage media1 and the term provided    
electronically means the provision      
remotely via electronic means4  7#d7    
,digital code ,the term digital code    
means a code that conveys only the right
 to obtain a digital good or digital    
service without making further payment4 
7#e7 ,digital good ,the term digital    
good means any software or other good   
that is delivered or transferred        
electronically1 including sounds1       
images1 data1 facts1 or combinations    
thereof1 maintained in digital format1  
where such good is the true object of   
the transaction1 rather than the        
activity or service performed to create 
such good1 and includes1 as an          
incidental component1 charges for the   
delivery or transfer of the digital     
good4  7#f7 ,digital service  7,a7 ,in  
general ,the term digital service means 
any service that is provided            
electronically1 including the provision 
of remote access to or use of a digital 
good1 and includes1 as an incidental    

component1 charges for the electronic   
provision of the digital service to the 
customer4  7,b7 ,exceptions ,the term   
digital service does not include a      
service that is predominantly           
attributable to the direct1             
contemporaneous expenditure of live     
human effort1 skill1 or expertise1 a    
telecommunications service1 an ancillary
 service1 ,internet access service1     
audio or video programming service1 or a
 hotel intermediary service4  7,c7      
,clarifying definitions ,for purposes of
 subparagraph 7,b7--  7i7 the term      
ancillary service means a service that  
is associated with or incidental to the 
provision of telecommunications         
services1 including1 but not limited to1
 detailed telecommunications billing1   
directory assistance1 vertical service1 
and voice mail services2  7ii7 the term 
audio or video programming service--    
7,i7 means programming provided by1 or  
generally considered comparable to      
programming provided by1 a radio or     

television broadcast station2 and       
7,,ii7 does not include interactive     
on-demand services1 as defined in       
paragraph 7#ab7 of section #fjb of the  
,communications ,act of #aicd 7#dg      
,u4,s4,c4 #ebb7ab771 pay-per-view       
services1 or services generally         
considered comparable to such services  
regardless of the technology used to    
provide such services2  7iii7 the term  
hotel intermediary service--  7,i7 means
 a service provided by a person that    
facilitates the sale1 use1 or possession
 of a hotel room or other transient     
accommodation to the general public2 and
  7,,ii7 does not include the purchase  
of a digital service by a person who    
provides a hotel intermediary service or
 by a person who owns1 operates1 or     
manages hotel rooms or other transient  
accommodations2  7iv7 the term ,internet
 access service means a service that    
enables users to connect to the         
,internet1 as defined in the ,internet  
,tax ,freedom ,act 7#dg ,u4,s4,c4 #aea  

note71 to access content1 information1  
or other services offered over the      
,internet2 and  7v7 the term            
telecommunications service--  7,i7 means
 the electronic transmission1           
conveyance1 or routing of voice1 data1  
audio1 video1 or any other information  
or signals to a point1 or between or    
among points2  7,,ii7 includes such     
transmission1 conveyance1 or routing in 
which computer processing applications  
are used to act on the form1 code1 or   
protocol of the content for purposes of 
transmission1 conveyance1 or routing1   
without regard to whether such service  
is referred to as voice over ,internet  
protocol service2 and  7,,iii7 does not 
include data processing and information 
services that allow data to be          
generated1 acquired1 stored1 processed1 
or retrieved and delivered by an        
electronic transmission to a purchaser  
where such purchaser's primary purpose  
for the underlying transaction is the   
processed data or information4  7#g7    

,discriminatory tax ,the term           
discriminatory tax means any tax imposed
 by a ,state or local jurisdiction on   
digital goods or digital services that--
  7,a7 is not generally imposed and     
legally collectible by such ,state or   
local jurisdiction on transactions      
involving similar property1 goods1 or   
services accomplished through other     
means2  7,b7 is not generally imposed   
and legally collectible at the same or  
higher rate by such ,state or local     
jurisdiction on transactions involving  
similar property1 goods1 or services    
accomplished through other means2  7,c7 
imposes an obligation to collect or pay 
the tax on a person1 other than the     
seller1 than the ,state or local        
jurisdiction would impose in the case of
 transactions involving similar         
property1 goods1 or services            
accomplished through other means2  7,d7 
establishes a classification of digital 
services or digital goods providers for 
purposes of establishing a higher tax   

rate to be imposed on such providers    
than the tax rate generally applied to  
providers of similar property1 goods1 or
 services accomplished through other    
means2 or  7,e7 does not provide a      
resale and component part exemption for 
the purchase of digital goods or digital
 services in a manner consistent with   
the ,state's resale and component part  
exemption applicable to the purchase of 
similar property1 goods1 or services    
accomplished through other means4  7#h7 
,multiple tax  7,a7 ,in general ,the    
term multiple tax means any tax that is 
imposed by one ,state1 one or more of   
that ,state's local jurisdictions1 or   
both on the same or essentially the same
 digital goods and digital services that
 is also subject to tax imposed by      
another ,state1 one or more local       
jurisdictions in such other ,state      
7whether or not at the same rate or on  
the same basis71 or both1 without a     
credit for taxes paid in other          
jurisdictions4  7,b7 ,exception ,the    

term multiple tax shall not include a   
tax imposed by a ,state and one or more 
political subdivisions thereof on the   
same digital goods and digital services 
or a tax on persons engaged in selling  
digital goods and digital services which
 also may have been subject to a sales  
or use tax thereon4  7#i7 ,primary use  
location  7,a7 ,in general ,the term    
primary use location means a street     
address representative of where the     
customer's use of a digital good or     
digital service will primarily occur1   
which shall be the residential street   
address or a business street address of 
the actual end user of the digital good 
or digital service1 including1 if       
applicable1 the address of a donee of   
the customer that is designated by the  
customer4  7,b7 ,customers that are not 
individuals ,for the purpose of         
subparagraph 7,a71 if the customer is   
not an individual1 the primary use      
location is determined by the location  
of the customer's employees or equipment

 7machine or device7 that make use of   
the digital good or digital service1 but
 does not include the location of a     
person who uses the digital good or     
digital service as the purchaser of a   
separate good or service from the       
customer4  7#aj7 ,sale and purchase ,the
 terms sale and purchase1 and all       
variations thereof1 shall include the   
provision1 lease1 rent1 license1 and    
corresponding variations thereof4  7#aa7
 ,seller  7,a7 ,in general ,the term    
seller means a person making sales of   
digital goods or digital services4  7,b7
 ,exceptions ,a person that provides    
billing service or electronic delivery  
or transport service on behalf of       
another unrelated or unaffiliated       
person1 with respect to the other       
person's sale of a digital good or      
digital service1 shall not be treated as
 a seller of that digital good or       
digital service4  7,c7 ,rule of         
construction ,nothing in this paragraph 
shall preclude the person providing the 

billing service or electronic delivery  
or transport service from entering into 
a contract with the seller to assume the
 tax collection and remittance          
responsibilities of the seller4  7#ab7  
,separate and discrete transaction ,the 
term separate and discrete transaction  
means a sale of a digital good1 digital 
code1 or a digital service sold in a    
single transaction which does not       
involve any additional charges or       
continued payment in order to maintain  
possession of the digital good or access
 to the digital service4  7#ac7 ,state  
or local jurisdiction ,the term ,state  
or local jurisdiction means any of the  
several ,states1 the ,district of       
,columbia1 any territory or possession  
of the ,united ,states1 a political     
subdivision of any ,state1 territory1 or
 possession1 or any governmental entity 
or person acting on behalf of such      
,state1 territory1 possession1 or       
subdivision and with the authority to   
assess1 impose1 levy1 or collect taxes4 

7#ad7 ,tax  7,a7 ,in general ,the term  
tax means any charge imposed by any     
,state or local jurisdiction for the    
purpose of generating revenues for      
governmental purposes1 including any    
tax1 charge1 or fee levied as a fixed   
charge or measured by gross amounts     
charged1 regardless of whether such tax1
 charge1 or fee is imposed on the seller
 or the customer and regardless of the  
terminology used to describe the tax1   
charge1 or fee4  7,b7 ,exclusions ,the  
term tax does not include an ad valorem 
tax1 a tax on or measured by capital1 a 
tax on or measured by net income1       
apportioned gross income1 apportioned   
revenue1 apportioned taxable margin1 or 
apportioned gross receipts1 or1 a ,state
 or local jurisdiction business and     
occupation tax imposed on a broad range 
of business activity in a ,state that   
enacted a ,state tax on gross receipts  
after ,january #a1 #aicb1 and before    
,january #a1 #aicf4  #h4 ,effective     
date2 application  7a7 ,general rule    

,this ,act shall take effect #fj days   
after the date of enactment of this     
,act4  7b7 ,exceptions ,a ,state or     
,local jurisdiction shall have #b years 
from the date of enactment of this ,act 
to modify any ,state or local tax statue
 enacted prior to date of enactment of  
this ,act to conform to the provisions  
set forth in sections #d and #e of this 
,act4  7c7 ,application to liabilities  
and pending cases ,nothing in this ,act 
shall affect liability for taxes accrued
 and enforced before the effective date 
of this ,act1 or affect ongoing         
litigation relating to such taxes4  #i4 
,savings provision ,if any provision or 
part of this ,act is held to be invalid 
or unenforceable by a court of competent
 jurisdiction for any reason1 such      
holding shall not affect the validity or
 enforceability of any other provision  
or part of this ,act unless such holding
 substantially limits or impairs the    
essential elements of this ,act1 in     
which case this ,act shall be deemed    

invalid and of no legal effect as of the
 date that the judgment on such holding 
is final and no longer subject to       
appeal4