Senate passes Conley legislation to collect sales taxes from online retailers
STATE HOUSE — The State Senate has passed legislation introduced by Sen. William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket) that would provide a process for collecting sales tax from out-of-state sellers such as online retailers.
The bill (2019-S 0251A) would extend the requirement to collect sales tax to remote sellers in a way that conforms to a recent U.S. Supreme Court decision making it easier for states to compel collection of the sales tax from retailers who do not have a physical presence in their state.
“Out-of-state retailers should adhere to the state sales tax the same as every store on Main Street,” said Senator Conley, who serves as chairman of the Senate Finance Committee. “It’s a question of fairness. This legislation is good news for Rhode Island’s brick-and-mortar businesses, allowing them to save the salaries and health benefits of their employees.”
The legislation would require a remote seller to register in Rhode Island for a permit to make sales at retail and collect and remit sales and use tax on all taxable sales into the state. The act comes on the heels of a U.S. Supreme Court case, South Dakota v. Wayfair, which granted states the authority to collect a sales tax on online purchases made by state residents. In that case, the Supreme Court determined that retailers don’t have to have physical presence in the state in order for the state to collect taxes — or that physical presence can be defined in other ways, such as an online presence.
“That decision will have major ramifications on Rhode Island and other states by leveling the playing field and taking away the stranglehold that online retailers have had for so long on our businesses,” said Senator Conley. “This law will eliminate that unfair market advantage. We are finally able to shift our tax policy to align with the shift in retail technology.”
The measure, which is cosponsored by Senators James A. Seveney (D-Dist. 11, Bristol, Portsmouth, Tiverton), Melissa A. Murray (D-Dist. 24, Woonsocket, North Smithfield), Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln) and Louis P. DiPalma (D-Dist. 12, Middletown, Newport, Tiverton, Little Compton), now heads to the House of Representatives, where similar legislation (2019-H 5278A) has been approved by the House Finance Committee. The legislation mirrors language that has been included in this year’s proposed budget.
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903