Tax & Accounting Blog

MTC Proposing Two Sales Tax Statutes

Indirect Tax, ONESOURCE, Sales and Use Tax, Sales Tax Nexus September 15, 2011

The Multistate Tax Commission (MTC) is proposing two new sales tax statutes that consist of a sales/use tax notice and reporting model, as well as an associate nexus model.

The notice and reporting model is based on Colorado’s law and would require sellers not registered with participating states to give notice to customers of a potential tax liability; send an annual report to customers listing the transactions on which tax was not collected; and provide an annual report to the state’s department of revenue to assist in identifying non-filers.

The associate nexus model would require Internet retailers to collect sales or use tax on purchases sourced to their state if a retailer contracts with a resident to pay a commission for purchases made through the resident’s Internet website and those purchases exceed a specified threshold amount.

In July, the MTC Executive Committee voted to address the model sales/use tax notice and reporting statute at its next meeting with the potential for possible adoption as a uniformity recommendation during the 2012 annual meeting.

For more information: Associate Nexus Memorandum