General Assembly passes legislation to collect sales taxes from online retailers
STATE HOUSE — The General Assembly today passed legislation introduced by Sen. William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket) and Rep. Marvin L. Abney (D-Dist. 73, Newport, Middletown) that would provide a process for collecting sales tax from out-of-state sellers — removing the unfair advantage online retailers have in competing against Rhode Island businesses.
The bill (2019-S 0251A, 2019-H 5278A) 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, which will now be competing on a more level playing field with their online counterparts.”
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 court decision and this legislation is a real victory for Rhode Island’s small businesses,” said Representative Abney, who serves as chairman of the House Finance Committee. “As long as online retailers were getting away with not paying sales tax, they had an unfair market advantage. This legislation will help us to catch up with the technological realities of the marketplace.”
The measure now moves to the governor’s office.
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903