A N A C T
RELATING TO TAXATION
It is enacted by the General Assembly as follows:
SECTION 1. Title 44 of the General Laws entitled "Taxation" is hereby amended by adding thereto the following chapter:
STREAMLINED SALES TAX SYSTEM
44-58-1. Short title. -- This chapter may be cited as the "Streamlined Sales Tax System for the 21st Century Act."
44-58-2. Legislative findings and intent - Legislative declaration. -- The general assembly finds and declares as follows:
(1) State and local tax systems should treat transactions in a competitively neutral manner.
(2) A simplified sales and use tax system that treats all transactions in a competitively neutral manner will strengthen and preserve the sales and use tax as vital state and local revenue sources and preserve state fiscal sovereignty.
(3) Remote sellers should not receive preferential tax treatment at the expense of local "main street" merchants, nor should such vendors be burdened with special, discriminatory or multiple taxes.
(4) The state should simplify sales and use taxes to reduce the administrative burden of collection.
(5) While states have the sovereign right to set their own tax policies, states working together have the opportunity to develop a more simple, uniform, and fair system of state sales and use taxation without federal government mandates or interference.
44-58-3. Definitions. -- As used in this chapter:
"Tax administrator" shall mean the tax administrator within the department of administration as provided for in section 44-1-1.
44-58-4. Legislative authorization to enter into multi-state discussions. -- The state tax administrator shall enter into discussions with states regarding development of a multi-state, voluntary, streamlined system for sales and use tax collection and administration. These discussions shall focus on a system that shall have the capability to determine whether the transaction is taxable or tax exempt, the appropriate tax rate to be applied to the transaction, and the total tax due on the transaction, and shall provide a method for collecting and remitting sales and use taxes to the state. Such system may provide compensation for the costs of collecting and remitting sales and use taxes. Discussions between the tax administrator and other states may include, but shall not be limited to the following:
(1) the development of a "joint request for information" from the potential public and private parties governing the specifications for such system;
(2) the mechanism for compensating parties for the development and operation of such system;
(3) establishment of minimum statutory simplification measures necessary for state participation in such system;
(4) measures to preserve confidentiality of taxpayer information and privacy rights of consumers.
Following these discussions, the tax administrator may proceed to issue a joint request for information.
44-58-5. Limited test authorization - Optional provision for state electing to participate in early test of simplified system. -- The tax administrator is hereby authorized to participate in a sales tax pilot project with other states and selected businesses to test means for simplifying sales and use tax administration and may enter into joint agreements for that purpose.
(1) Agreements to participate in such tests shall establish provisions for the administration, imposition and collection of sales and use taxes resulting in revenues paid that are the same as would be paid under and pursuant to the provisions of chapters 44-18 and 44-19 of the Rhode Island general laws.
(2) Parties to the agreements are excused from complying with the provisions of chapters 44-18 and 44-19 of the Rhode Island general laws to the extent a different procedure is required by the agreements, except for confidentiality of taxpayer information as detailed in section 44-57-6.
(3) Agreements authorized under this section shall terminate no later than December 31, 2001.
44-58-6. Confidentiality of taxpayer information. -- Return information submitted to any party or parties acting for and on behalf of the state shall be treated as confidential taxpayer information. Disclosures of confidential taxpayer information necessary under the provisions of this chapter shall be pursuant to a written agreement entered into between the tax administrator and the party or parties. Such party or parties shall be bound by the same requirements of confidentiality as the tax administrator under the provisions of chapters 44-18 and 44-19 of the Rhode Island general laws.
44-58-7. Legislative oversight. -- There is hereby created a joint legislative oversight committee. The committee shall consist of six (6) members to be selected as follows: three (3) members of the senate, at least one of whom shall be a member of a minority party, to be appointed by the senate majority leader; and three (3) members of the house of representatives, at least one of whom shall be a member of a minority party, to be appointed by the speaker of the house. The tax administrator shall provide testimony and information as requested by the committee. The tax administrator shall provide quarterly reports to the governor, the speaker of the house, the senate majority leader, and to the members of the joint legislative oversight committee on the progress of multi-state discussions.
44-58-8. Final report to the governor and the legislature. -- By March 1, 2001, the tax administrator shall report to the governor and to the speaker of the house, the senate majority leader and to the members of the joint legislative oversight committee on the status of multi-state discussions and, if a proposed system has been agreed upon by participating states, shall also recommend whether the state should participate in such system.
SECTION 2. This act shall take effect upon passage.