It seemed, in the spring of 2013, that Internet sales tax would soon become a reality. The Senate had overwhelmingly passed the Marketplace Fairness Act of 2013 (MFA) and sent it to the House for consideration. Amazon.com was collecting sales tax in a growing number of states, including New York, where the company's efforts to battle the state's Amazon tax law failed. Small business owners and lawmakers across the nation were increasingly calling for remote retailers to collect sales tax like their brick-and-mortar counterparts. Numerous states were considering or enacting some sort of remote sales tax legislation.

And then momentum stalled. Several federal lawmakers said they would work to ensure the bill would not become law. In September 2013, Chairman of the House Judiciary Committee Bob Goodlatte (R-VA) expressed concerns that the bill was too complex and released Seven Basic Principles on Remote Sales Tax to guide future discussions. And then the issue went dark until March 2014, when a hearing was held on the matter.

2014 was then going to be the Year of Online Sales Tax, although MFA did nothing but gather dust in the House. When the measure failed to come to a vote during the regular session, pundits said it would come up during the Lame Duck Session. House Speaker John Boehner said it absolutely would not. He proved correct, and 2015 arrived with no remote sales tax law.

Nonetheless, optimism reigns among proponents of Internet sales tax legislation. Perhaps 2015 will be the year. And if it is, now is a good time to talk to clients about how this could impact them.

There are currently three versions of remote sales tax legislation floating around the nation's capitol. Each one would create different consequences for remote retailers. The best thing you can do for your clients is to help them understand all three – and help prepare them to eventually collect in states where they do business. The lack of a federal solution has sparked a plethora of remote sales tax legislation at the state level.

The new version of MFA is similar to the 2013 bill and is, in fact, sponsored by many of the same lawmakers.

Under MFA 2015 (Senate Bill 698):

• States with simplified tax code are given additional taxing authority over remote sales.
• There is a small seller exception for sellers with gross annual receipts of less than $1,000,000 in total U.S. remote sales.
• Sales are destination-sourced (the sales tax rate is based on the location where the buyer receives the product or service).

The 23 member states of the Streamlined Sales and Use Tax Agreement (SSUTA) are well positioned to take advantage of this legislation. They are authorized to collect and remit sales and use taxes on remote sales "pursuant to the provisions of the Streamlined Sales and Use Tax Agreement… beginning 180 days after the State publishes notices of the State's intent to exercise the authority under this Act, but no earlier than the first day of the calendar quarter that is at least 180 days after the date of the enactment of this Act."

States that are not full members of the SSUTA must adopt and implement certain "minimum simplification requirements" in order to collect and remit sales and use taxes on remote sales. For example, they must have a system in place to provide remote sellers and certified software providers with 90 days' notice of a state or local rate change. The authority to collect "shall commence beginning no earlier than the first day of the calendar quarter that is at least 6 months after the date that the state" implements the minimum simplification requirements.

States could not "begin to exercise the authority" under MFA 2015:

• Before the date that is one year after the date of the enactment of this Act; and
• Between October 1 and December 31 of the first calendar year beginning after the date of the enactment of this Act.

MFA 2015 would have no effect on nexus; it would neither alter existing nexus nor create nexus between a state and a seller. Sales made to states with no sales tax would not be subject to tax.

In addition, it would have no effect on seller choice: "Nothing in this Act shall be construed to deny the ability of a remote seller to deploy and utilize a certified software provider of the seller's choice." Finally, MFA 2015 would not impose new sales and use taxes or affect intrastate sales or the Mobile Telecommunications Sourcing Act.

The Remote Transaction Parity Act of 2015, drafted by Rep. Jason Chaffetz (R-UT), is similar to the MFA in that it would allow states to apply sales tax to remote sales. The measure is still a draft.

As with MFA, the 23 member states of the SSUTA would be authorized to require remote sellers to collect and remit sales tax "beginning 180 days after the State publishes notices of the State's intent to exercise the authority under this Act." And as under MFA, remote sales tax could not begin "before the date that is 1 year after the date of the enactment of this Act," and during the October 1 – December 31 holiday shopping period "of the first calendar year beginning after the date of the enactment of this Act."

Non-member states would have to adopt and implement certain minimum simplification requirements. Only after such requirements have been met may remote sales tax collection start, and then only as early as the first day of a month and commencing "no earlier than the first day of the calendar quarter that is at least 6 months after the date that the state enacts legislation to exercise the authority granted by this Act."

The small remote seller exception is different from the small seller exception under MFA. In the Remote Transaction Parity Act, remote sellers must:

• "Have gross annual receipts exceeding $10,000,000 in the calendar year preceding the first calendar year any State can exercise the authority provided under this Act."
• Have gross annual receipts exceeding $5,000,000 in the "second calendar year any State can exercise the authority provided under this Act."
• Have gross annual receipts exceeding $1,000,000 for the "third and subsequent calendar year any State can exercise the authority provided under this Act."

In addition, the December 2014 draft bill provides for a catalog seller exception. Sellers that sell only through catalogs and do not engage in any "sales activity on the Internet of any kind whatsoever, whether directly or through another person, including advertising, order acceptance, solicitation, and payment processing" may not be required to collect remote sales tax.

The Remote Transaction Parity Act, like MFA, would have no effect on nexus; sales made to states with no sales tax would not be subject to tax. In addition, it would create no new taxes and have no effect on intrastate sales or the Mobile Telecommunications Sourcing Act.

House Judiciary Chair Bob Goodlatte (of 7 Principles to Guide Online Sales Tax fame) and Rep. Anna Eshoo (D-CA) quietly distributed a draft version of the Online Sales Simplification Act (OSSA) to committee members in January.

OSSA is quite different from MFA 2015 and the Remote Transactions Parity Act. Most notable, perhaps, is that it does not provide for a small seller exception and it would allow states to require in-state sellers to collect sales tax on all interstate sales.

Under OSSA:

• Sales are origin-sourced (the sales tax rate is based on the location of the seller instead of the purchaser).
• A lowest combined rate of sales tax is established for remote sellers from states with no sales tax.
• Sellers remit the collected sales tax to the origin state.
• States "determine the total tax imposed on remote sales for which that State was the origin State" each month.
• The taxing authority of each participating state "shall distribute the tax collected on remote sales for which that State was the origin State to each State that was a destination State for such sales, in proportion to that State's share of the collected tax on remote sales, using a single entity (including with respect to funding and staffing)...."

The Sales Simplification Act adds layers of complexity to remote sales tax collection. Under it, "the lowest combined rate within any of the contiguous 48 States that do impose a sales tax" would be determined and remote sellers located in states without sales tax would be required to collect that "flat tax" on all remote sales.

Also, the origin-sourcing makes it so a Washington State resident who purchases an item on the Internet from a seller based in Florida would pay the Florida rate of sales tax instead of the Washington rate (eventually, Washington State would receive that revenue).

States that opt to not participate in this method would be prohibited from imposing sales tax on remote sales.

The issue of remote sales tax has long been brewing and eventually it will come to a head. Earlier this year, Supreme Court Justice Kennedy spoke of "a serious continuing injustice faced by Colorado and other states." He was referring to the fact that the Court had, in the past, determined that "States cannot require a business to collect use taxes… if the business does not have a physical presence in the State." He continued with this: