RI Senate Passes Bill to Collect Sales Taxes from Online Retailers

Tuesday, March 12, 2019

 

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The RI Senate passed legislation that would provide a process for collecting sales tax from out-of-state sellers such as online retailers.

The bill was introduced by Senator William Conley Jr.

“Out-of-state retailers should adhere to the state sales tax the same as every store on Main Street. 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,” said Conley.

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The bill now goes to the House of Representatives.

The Legislation

The bill 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.

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.

South Dakota vs Wayfair

The legislation follows the U.S. Supreme Court case, South Dakota v. Wayfair.

The case granted states the authority to collect a sales tax on online purchases made by state residents.

Conley added, “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. 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.”

 

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