,,ii #aac? ,,congress #a/ ,session ,s4 #acfd ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,july #be1 #bjac ,mr4 ,wyd5 7= himself & ,mr4 ,?une7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to promote neutrality1 simplicity1 & fairness 9 ! taxation ( digital goods & digital s]vices4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,digital ,goods & ,s]vices ,tax ,fairness ,act ( #bjac4 #b4 ,multiple & discrim9atory taxes prohibit$ ,no ,/ate or local jurisdiction %all impose multiple or discrim9atory taxes on ! sale or use ( a digital good or a digital s]vice4 #c4 ,s\rc+ limitation ,subject to section #f7;a71 taxes on ! sale ( a digital good or a digital s]vice may only be impos$ by a ,/ate or local jurisdiction ^: t]ritorial limits encompass ! cu/om] tax address4 #d4 ,cu/om] tax address 7a7 ,sell] obligation 7#a7 ,9 g5]al ,subject to subsection 7e77#b71 a sell] %all be responsible = obta9+ & ma9ta9+ 9 ! ord9>y c\rse ( bus9ess ! cu/om] tax address ) respect to ! sale ( a digital good or a digital s]vice1 & %all be responsible = collect+ & remitt+ ! correct am\nt ( tax = ! ,/ate & local jurisdictions ^: t]ritorial limits encompass ! cu/om] tax address if ! ,/ate has ! au?ority to require su* collection & remittance by ! sell]4 7#b7 ,c]ta9 transactions ,:5 a cu/om] tax address is n a bus9ess location ( ! sell] "u clause 7i7 ( section #g7b77;,a7-- 7,a7 if ! sale is a sep>ate & discrete transaction1 !n a sell] %all use reasonable ef=ts to obta9 a cu/om] tax address1 z su* ef=ts are describ$ 9 clauses 7iii71 7iv71 & 7v7 ( section #g7b77;,a71 be=e resort+ to us+ a cu/om] tax address z det]m9$ by clause 7vi7 ( su* section #g7b77;,a72 & 7,b7 if ! sale is n a sep>ate & discrete transaction1 !n a sell] %all use reasonable ef=ts to obta9 a cu/om] tax address1 z su* ef=ts are describ$ 9 clauses 7ii71 7iii71 7iv71 & 7v7 ( section #g7b77;,a71 be=e resort+ to us+ a cu/om] tax address z det]m9$ by clause 7vi7 ( su* section #g7b77;,a74 7b7 ,reliance on cu/om]-,povid$ in=mation ,a sell] t relies 9 good fai? on in=mation provid$ by a cu/om] to det]m9e a cu/om] tax address %all n be held liable = any additional tax bas$ on a diff]5t det]m9ation ( t cu/om] tax address by a ,/ate or local jurisdiction or c\rt ( compet5t jurisdiction1 except if & until b9d+ notice is giv5 z provid$ 9 subsection 7c74 7c7 ,address correction ,if a ,/ate or local jurisdiction is au?oriz$ "u ,/ate law to adm9i/] a tax1 & ! jurisdiction det]m9es t ! cu/om] tax address det]m9$ by a sell] is n ! cu/om] tax address t w\ld h be5 det]m9$ "u section #g7b77;,a7 if ! sell] _h ! additional in=mation provid$ by ! ,/ate or local jurisdiction1 !n ! jurisdiction may give b9d+ notice to ! sell] to correct ! cu/om] tax address on a prospective basis1 effective n less ?an #de days aft] ! date ( su* notice1 if-- 7#a7 :5 ! det]m9ation is made by a local jurisdiction1 su* local jurisdiction obta9s ! cons5t ( all affect$ local jurisdictions )9 ! ,/ate be=e giv+ su* notice ( det]m9ation2 & 7#b7 be=e ! ,/ate or local jurisdiction gives su* notice ( det]m9ation1 ! cu/om] is giv5 an opportunity to demon/rate 9 accordance ) applicable ,/ate or local tax adm9i/rative proc$ures t ! address us$ is ! cu/om] tax address4 7d7 ,coord9ation ) s\rc+ ( mobile telecommunications s]vice 7#a7 ,9 g5]al ,if-- 7,a7 a digital good or a digital s]vice is sold to a cu/om] by a home s]vice provid] ( mobile telecommunications s]vice t is subject to be+ s\rc$ "u section #aag ( title #d1 ,unit$ ,/ates ,code1 or ! *>ges = a digital good or a digital s]vice are bill$ to ! cu/om] by su* a home s]vice provid]2 & 7,b7 ! digital good or digital s]vice is deliv]$1 transf]r$1 or provid$ electronically by means ( mobile telecommunications s]vice t is deem$ to be provid$ by su* home s]vice provid] "u section #aag ( su* title1 !n ! home s]vice provid] &1 if diff]5t1 ! sell] ( ! digital good or digital s]vice1 may presume t ! cu/om]'s place ( prim>y use = su* mobile telecommunications s]vice is ! cu/om] tax address describ$ 9 section #g7b77;,b7 ) respect to ! sale ( su* digital good or digital s]vice4 7#b7 ,def9itions ,= purposes ( ?is subsection1 ! t]ms home s]vice provid]1 mobile telecommunications s]vice1 & place ( prim>y use h ! same mean+s z 9 section #abd ( title #d1 ,unit$ ,/ates ,code4 7e7 ,multiple locations 7#a7 ,9 g5]al ,if a digital good or a digital s]vice is sold to a cu/om] & available = use by ! cu/om] 9 multiple locations simultane\sly1 ! sell] may det]m9e ! cu/om] tax addresses us+ a reasonable & consi/5t me?od bas$ on ! addresses ( use z provid$ by ! cu/om] & det]m9$ 9 agreem5t ) ! cu/om] at ! "t ( sale4 7#b7 ,direct cu/om] paym5t 7,a7 ,e/abli%m5t ( direct paym5t proc$ures ,ea* ,/ate & local jurisdiction %all provide reasonable proc$ures t p]mit ! direct paym5t by a qualifi$ cu/om]1 z det]m9$ "u proc$ures e/abli%$ by ! ,/ate or local jurisdiction1 ( taxes t are on ! sale ( digital goods & digital s]vices to multiple locations ( ! cu/om] & t w\ld1 abs5t su* proc$ures1 be requir$ or p]mitt$ by law to be collect$ f ! cu/om] by ! sell]4 7,b7 ,effect ( cu/om] compliance ) direct paym5t proc$ures ,:5 a qualifi$ cu/om] elects to pay tax directly "u ! proc$ures e/abli%$ "u subp>agraph 7,a71 ! sell] %all-- 7i7 h no obligation to obta9 ! multiple cu/om] tax addresses "u subsection 7a72 & 7ii7 n be liable = su* tax1 provid$ ! sell] foll[s ! ,/ate & local proc$ures & ma9ta9s appropriate docum5tation 9 its books & records4 #e4 ,treatm5t ( bundl$ transactions & digital codes 7a7 ,bundl$ transaction ,if a *>ge = a di/9ct & id5tifiable digital good or a digital s]vice is aggregat$ ) & n sep>ately /at$ f "o or m *>ges = o!r di/9ct & id5tifiable goods or s]vices1 :i* may include o!r digital goods or digital s]vices1 & any "p ( ! aggregation is subject to taxation1 !n ! entire aggregation may be subject to taxation1 except to ! ext5t t ! sell] c id5tify1 by reasonable & v]ifiable /&>ds1 "o or m *>ges = ! nontaxable goods or s]vices f its books & records kept 9 ! ord9>y c\rse ( bus9ess4 7b7 ,digital code ,! tax treatm5t ( ! sale ( a digital code %all be ! same z ! tax treatm5t ( ! sale ( ! digital good or digital s]vice to :i* ! digital code relates4 7c7 ,rule ( con/ruction ,! sale ( a digital code %all be consid]$ ! sale transaction = purposes ( ?is ,act4 #f4 ,no inf]5ce 7a7 ,cu/om] liability ,subject to ! prohibition provid$ 9 section #b1 no?+ 9 ?is ,act modifies1 impairs1 sup]s$es1 or au?orizes ! modification1 impairm5t1 or sup]session ( any law all[+ a ,/ate or local jurisdiction to impose tax on & collect tax directly f a cu/om] bas$ ^u use ( a digital good or digital s]vice 9 su* ,/ate4 7b7 ,non-,tax matt]s ,?is ,act %all n be con/ru$ to apply 91 or to affect1 any non-tax regulatory matt] or o!r context4 7c7 ,/ate tax matt]s ,! def9itions conta9$ 9 ?is ,act are int5d$ to be us$ ) respect to int]pret+ ?is ,act4 ,no?+ 9 ?is ,act %all prohibit a ,/ate or local jurisdiction f adopt+ diff]5t nom5clature to en=ce ! provisions set =? 9 ?is ,act4 #g4 ,def9itions ,9 ?is ,act1 ! foll[+ def9itions %all apply3 7#a7 ,cu/om] ,! t]m cu/om] means a p]son t pur*ases a digital good1 digital s]vice1 or digital code4 7#b7 ,cu/om] tax address 7,a7 ,9 g5]al ,! t]m cu/om] tax address means-- 7i7 ) respect to ! sale ( a digital good or digital s]vice t is receiv$ by ! cu/om] at a bus9ess location ( ! sell]1 su* bus9ess location2 7ii7 if clause 7i7 does n apply & ! prim>y use location ( ! digital good or digital s]vice is kn[n by ! sell]1 su* location2 7iii7 if nei!r clause 7i7 nor clause 7ii7 applies1 & if ! location :]e ! digital good or digital s]vice is receiv$ by ! cu/om]1 or by a donee ( ! cu/om] t is id5tifi$ by su* cu/om]1 is kn[n to ! sell] & ma9ta9$ 9 ! ord9>y c\rse ( ! sell]'s bus9ess1 su* location2 7iv7 if none ( clauses 7i7 ?r\gh 7iii7 applies1 ! location indicat$ by an address = ! cu/om] t is available f ! bus9ess records ( ! sell] t are ma9ta9$ 9 ! ord9>y c\rse ( ! sell]'s bus9ess1 :5 use ( ! address does n con/itute bad fai?2 7v7 if none ( clauses 7i7 ?r\gh 7iv7 applies1 ! location indicat$ by an address = ! cu/om] obta9$ dur+ ! consummation ( ! sale1 includ+ ! address ( a cu/om]'s paym5t in/rum5t1 :5 use ( ?is address does n con/itute bad fai?2 or 7vi7 if none ( clauses 7i7 ?r\gh 7v7 applies1 includ+ ! circum/ance 9 :i* ! sell] is )\t suffici5t in=mation to apply su* p>agraphs1 ! location f :i* ! digital good 0 fir/ available = transmission by ! sell] 7disreg>d+ = ^! purposes any location t m]ely provides = ! digital transf] ( ! product sold71 or f :i* ! digital s]vice 0 provid$ by ! sell]4 7,b7 ,exclusion ,= purposes ( ?is p>agraph1 ! t]m location does n include ! location ( a s]v]1 ma*9e1 or device1 includ+ an int]m$i>y s]v]1 t is us$ simply = r\t+ or /orage4 7#c7 ,deliv]$ or transf]r$ electronically2 provid$ electronically ,! t]m deliv]$ or transf]r$ electronically means ! deliv]y or transf] by means o!r ?an tangible /orage m$ia1 & ! t]m provid$ electronically means ! provision remotely via electronic means4 7#d7 ,digital code ,! t]m digital code means a code t conveys only ! "r to obta9 a digital good or digital s]vice )\t mak+ fur!r paym5t4 7#e7 ,digital good ,! t]m digital good means any s(tw>e or o!r good t is deliv]$ or transf]r$ electronically1 includ+ s\nds1 images1 data1 facts1 or comb9ations !re(1 ma9ta9$ 9 digital =mat1 :]e su* good is ! true object ( ! transaction1 r ?an ! activity or s]vice p]=m$ to create su* good1 & includes1 z an incid5tal compon5t1 *>ges = ! deliv]y or transf] ( ! digital good4 7#f7 ,digital s]vice 7,a7 ,9 g5]al ,! t]m digital s]vice means any s]vice t is provid$ electronically1 includ+ ! provision ( remote access to or use ( a digital good1 & includes1 z an incid5tal compon5t1 *>ges = ! electronic provision ( ! digital s]vice to ! cu/om]4 7,b7 ,exceptions ,! t]m digital s]vice does n include a s]vice t is pr$om9antly attributable to ! direct1 contemporane\s exp5diture ( live human ef=t1 skill1 or exp]tise1 a telecommunications s]vice1 an ancill>y s]vice1 ,int]net access s]vice1 audio or video programm+ s]vice1 or a hotel int]m$i>y s]vice4 7,c7 ,cl>ify+ def9itions ,= purposes ( subp>agraph 7,b7-- 7i7 ! t]m ancill>y s]vice means a s]vice t is associat$ ) or incid5tal to ! provision ( telecommunications s]vices1 includ+1 b n limit$ to1 detail$ telecommunications bill+1 directory assi/ance1 v]tical s]vice1 & voice mail s]vices2 7ii7 ! t]m audio or video programm+ s]vice-- 7,i7 means programm+ provid$ by1 or g5]ally consid]$ comp>able to programm+ provid$ by1 a radio or television broadca/ /ation2 & 7,,ii7 does n include int]active on-dem& s]vices1 z def9$ 9 p>agraph 7#ab7 ( section #fjb ( ! ,communications ,act ( #aicd 7#dg ,u4,s4,c4 #ebb7ab771 pay-p]-view s]vices1 or s]vices g5]ally consid]$ comp>able to su* s]vices reg>dless ( ! te*nology us$ to provide su* s]vices2 7iii7 ! t]m hotel int]m$i>y s]vice-- 7,i7 means a s]vice provid$ by a p]son t facilitates ! sale1 use1 or possession ( a hotel room or o!r transi5t accommodation to ! g5]al public2 & 7,,ii7 does n include ! pur*ase ( a digital s]vice by a p]son :o provides a hotel int]m$i>y s]vice or by a p]son :o owns1 op]ates1 or manages hotel rooms or o!r transi5t accommodations2 7iv7 ! t]m ,int]net access s]vice means a s]vice t enables us]s to connect to ! ,int]net1 z def9$ 9 ! ,int]net ,tax ,fre$om ,act 7#dg ,u4,s4,c4 #aea note71 to access cont5t1 in=mation1 or o!r s]vices (f]$ ov] ! ,int]net2 & 7v7 ! t]m telecommunications s]vice-- 7,i7 means ! electronic transmission1 conveyance1 or r\t+ ( voice1 data1 audio1 video1 or any o!r in=mation or signals to a po9t1 or betwe5 or among po9ts2 7,,ii7 includes su* transmission1 conveyance1 or r\t+ 9 :i* comput] process+ applications are us$ to act on ! =m1 code1 or protocol ( ! cont5t = purposes ( transmission1 conveyance1 or r\t+1 )\t reg>d to :e!r su* s]vice is ref]r$ to z voice ov] ,int]net protocol s]vice2 & 7,,iii7 does n include data process+ & in=mation s]vices t all[ data to be g5]at$1 acquir$1 /or$1 process$1 or retriev$ & deliv]$ by an electronic transmission to a pur*as] :]e su* pur*as]'s prim>y purpose = ! und]ly+ transaction is ! process$ data or in=mation4 7#g7 ,discrim9atory tax ,! t]m discrim9atory tax means any tax impos$ by a ,/ate or local jurisdiction on digital goods or digital s]vices t-- 7,a7 is n g5]ally impos$ & legally collectible by su* ,/ate or local jurisdiction on transactions involv+ simil> prop]ty1 goods1 or s]vices accompli%$ ?r\gh o!r means2 7,b7 is n g5]ally impos$ & legally collectible at ! same or high] rate by su* ,/ate or local jurisdiction on transactions involv+ simil> prop]ty1 goods1 or s]vices accompli%$ ?r\gh o!r means2 7,c7 imposes an obligation to collect or pay ! tax on a p]son1 o!r ?an ! sell]1 ?an ! ,/ate or local jurisdiction w\ld impose 9 ! case ( transactions involv+ simil> prop]ty1 goods1 or s]vices accompli%$ ?r\gh o!r means2 7,d7 e/abli%es a classification ( digital s]vices or digital goods provid]s = purposes ( e/abli%+ a high] tax rate to be impos$ on su* provid]s ?an ! tax rate g5]ally appli$ to provid]s ( simil> prop]ty1 goods1 or s]vices accompli%$ ?r\gh o!r means2 or 7,e7 does n provide a resale & compon5t "p exemption = ! pur*ase ( digital goods or digital s]vices 9 a mann] consi/5t ) ! ,/ate's resale & compon5t "p exemption applicable to ! pur*ase ( simil> prop]ty1 goods1 or s]vices accompli%$ ?r\gh o!r means4 7#h7 ,multiple tax 7,a7 ,9 g5]al ,! t]m multiple tax means any tax t is impos$ by "o ,/ate1 "o or m ( t ,/ate's local jurisdictions1 or bo? on ! same or ess5tially ! same digital goods & digital s]vices t is also subject to tax impos$ by ano!r ,/ate1 "o or m local jurisdictions 9 su* o!r ,/ate 7:e!r or n at ! same rate or on ! same basis71 or bo?1 )\t a cr$it = taxes paid 9 o!r jurisdictions4 7,b7 ,exception ,! t]m multiple tax %all n include a tax impos$ by a ,/ate & "o or m political subdivisions !re( on ! same digital goods & digital s]vices or a tax on p]sons engag$ 9 sell+ digital goods & digital s]vices :i* also may h be5 subject to a sales or use tax !reon4 7#i7 ,prim>y use location 7,a7 ,9 g5]al ,! t]m prim>y use location means a /reet address repres5tative ( :]e ! cu/om]'s use ( a digital good or digital s]vice w prim>ily occur1 :i* %all be ! resid5tial /reet address or a bus9ess /reet address ( ! actual end us] ( ! digital good or digital s]vice1 includ+1 if applicable1 ! address ( a donee ( ! cu/om] t is designat$ by ! cu/om]4 7,b7 ,cu/om]s t are n individuals ,= ! purpose ( subp>agraph 7,a71 if ! cu/om] is n an individual1 ! prim>y use location is det]m9$ by ! location ( ! cu/om]'s employees or equipm5t 7ma*9e or device7 t make use ( ! digital good or digital s]vice1 b does n include ! location ( a p]son :o uses ! digital good or digital s]vice z ! pur*as] ( a sep>ate good or s]vice f ! cu/om]4 7#aj7 ,sale & pur*ase ,! t]ms sale & pur*ase1 & all v>iations !re(1 %all include ! provision1 lease1 r5t1 lic5se1 & correspond+ v>iations !re(4 7#aa7 ,sell] 7,a7 ,9 g5]al ,! t]m sell] means a p]son mak+ sales ( digital goods or digital s]vices4 7,b7 ,exceptions ,a p]son t provides bill+ s]vice or electronic deliv]y or transport s]vice on behalf ( ano!r unrelat$ or unaffiliat$ p]son1 ) respect to ! o!r p]son's sale ( a digital good or digital s]vice1 %all n be treat$ z a sell] ( t digital good or digital s]vice4 7,c7 ,rule ( con/ruction ,no?+ 9 ?is p>agraph %all preclude ! p]son provid+ ! bill+ s]vice or electronic deliv]y or transport s]vice f ent]+ into a contract ) ! sell] to assume ! tax collection & remittance responsibilities ( ! sell]4 7#ab7 ,sep>ate & discrete transaction ,! t]m sep>ate & discrete transaction means a sale ( a digital good1 digital code1 or a digital s]vice sold 9 a s+le transaction :i* does n involve any additional *>ges or cont9u$ paym5t 9 ord] to ma9ta9 possession ( ! digital good or access to ! digital s]vice4 7#ac7 ,/ate or local jurisdiction ,! t]m ,/ate or local jurisdiction means any ( ! sev]al ,/ates1 ! ,di/rict ( ,columbia1 any t]ritory or possession ( ! ,unit$ ,/ates1 a political subdivision ( any ,/ate1 t]ritory1 or possession1 or any gov]nm5tal entity or p]son act+ on behalf ( su* ,/ate1 t]ritory1 possession1 or subdivision & ) ! au?ority to assess1 impose1 levy1 or collect taxes4 7#ad7 ,tax 7,a7 ,9 g5]al ,! t]m tax means any *>ge impos$ by any ,/ate or local jurisdiction = ! purpose ( g5]at+ rev5ues = gov]nm5tal purposes1 includ+ any tax1 *>ge1 or fee levi$ z a fix$ *>ge or measur$ by gross am\nts *>g$1 reg>dless ( :e!r su* tax1 *>ge1 or fee is impos$ on ! sell] or ! cu/om] & reg>dless ( ! t]m9ology us$ to describe ! tax1 *>ge1 or fee4 7,b7 ,exclusions ,! t]m tax does n include an ad valorem tax1 a tax on or measur$ by capital1 a tax on or measur$ by net income1 apportion$ gross income1 apportion$ rev5ue1 apportion$ taxable m>g91 or apportion$ gross receipts1 or1 a ,/ate or local jurisdiction bus9ess & occupation tax impos$ on a broad range ( bus9ess activity 9 a ,/ate t enact$ a ,/ate tax on gross receipts aft] ,janu>y #a1 #aicb1 & be=e ,janu>y #a1 #aicf4 #h4 ,effective date2 application 7a7 ,g5]al rule ,?is ,act %all take effect #fj days aft] ! date ( enactm5t ( ?is ,act4 7b7 ,exceptions ,a ,/ate or ,local jurisdiction %all h #b ye>s f ! date ( enactm5t ( ?is ,act to modify any ,/ate or local tax /atue enact$ prior to date ( enactm5t ( ?is ,act to con=m to ! provisions set =? 9 sections #d & #e ( ?is ,act4 7c7 ,application to liabilities & p5d+ cases ,no?+ 9 ?is ,act %all affect liability = taxes accru$ & en=c$ be=e ! effective date ( ?is ,act1 or affect ongo+ litigation relat+ to su* taxes4 #i4 ,sav+s provision ,if any provision or "p ( ?is ,act is held to be invalid or un5=ceable by a c\rt ( compet5t jurisdiction = any reason1 su* hold+ %all n affect ! validity or en=ceability ( any o!r provision or "p ( ?is ,act unless su* hold+ sub/antially limits or impairs ! ess5tial elem5ts ( ?is ,act1 9 :i* case ?is ,act %all be deem$ invalid & ( no legal effect z ( ! date t ! judgm5t on su* hold+ is f9al & no long] subject to appeal4