Arizona lawmaker asks Congress to clarify e-commerce taxation laws

(The Center Square) – An Arizona state lawmaker is calling on the the state's congressional delegation to find a federal solution to sales tax compliance issues impacting small businesses.

Rep. Neal Carter, R-San Tan Valley, is hoping federal legislation would simplify the process following the South Dakota v. Wayfair decision to make it clear what processes businesses should follow to avoid getting audited in areas where it has no ties with, besides making a transaction with a customer there.

"The idea that software would solve this problem is in large part a mirage. Taxpayers pay tens of thousands of dollars per month for software currently and still find themselves liable for errors. Though there are millions of small businesses nationwide, just a few thousand have signed up for the Streamlined Sales Tax program," Carter wrote. "The undue burden placed on taxpayers remains unacceptable and needs to be addressed."

He is asking Congress to "protect taxpayers from endless audits by eliminating the ability of counties and municipalities from auditing out-of-state businesses. Businesses should have to respond to Departments of Revenue, not each municipal auditor across the land."

In addition, he's calling for "uniformity for nexus and sourcing laws for out-of-state taxpayers."

The Wayfair decision from 2018 scrapped the notion that a business must have a "physical presence" in the "taxing state" in order to be subjected to those taxes, according to the Tax Foundation . It stemmed from the state of South Dakota's frustration that the state could not collection tax revenue from those online transactions, namely with the Wayfair and other houseware companies.