Bills of Congress by U.S. Congress

H.R.1494 - Sporting Goods Excise Tax Modernization Act (119th Congress)

Summary

H.R. 1494, the Sporting Goods Excise Tax Modernization Act, amends the Internal Revenue Code of 1986 to treat certain marketplace providers as importers for the purposes of excise tax on sporting goods. This bill aims to clarify and modernize the application of excise taxes on sporting goods sold through online marketplaces.

The bill defines 'marketplace providers' as those who host listings, facilitate sales, and collect payments. It ensures that these providers are responsible for collecting and remitting excise taxes on imported sporting goods.

The Act specifies that it applies to sales occurring in calendar quarters beginning 60 days after the enactment date, and includes a provision to prevent any inference regarding the treatment of other persons as importers under existing law.

Expected Effects

The primary effect of this bill is to shift the responsibility for collecting and remitting excise taxes on imported sporting goods from potentially numerous individual sellers to the marketplace providers. This is intended to streamline the tax collection process and improve compliance.

It will likely increase the tax burden on marketplace providers, who will need to implement systems to track and pay these taxes. Consumers may see slight price increases as these costs are potentially passed on.

Potential Benefits

  • Increased Tax Revenue: By clarifying tax responsibilities, the government may see increased revenue from excise taxes on sporting goods.
  • Simplified Tax Collection: Consolidating tax collection through marketplace providers simplifies the process for the IRS.
  • Level Playing Field: Ensures that online marketplaces are subject to the same tax obligations as traditional brick-and-mortar stores.
  • Modernized Tax Law: Updates the tax code to reflect the current e-commerce landscape.
  • Reduced Tax Evasion: By assigning clear responsibility to marketplace providers, the bill aims to reduce tax evasion.

Potential Disadvantages

  • Increased Burden on Marketplace Providers: Marketplace providers will face increased administrative and compliance costs.
  • Potential for Increased Consumer Prices: Marketplace providers may pass on the cost of tax compliance to consumers through higher prices.
  • Complexity in Implementation: Defining and identifying 'marketplace providers' and 'specified marketplace sales' may create complexity and require further regulatory guidance.
  • Potential for Litigation: Ambiguities in the law could lead to legal challenges from marketplace providers.
  • Disproportionate Impact on Small Businesses: Smaller marketplace providers may struggle to comply with the new regulations compared to larger companies.

Constitutional Alignment

The bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. It does not appear to infringe upon any specific constitutional rights or protections.

The bill's focus on interstate commerce and taxation falls within the purview of congressional authority. It aims to clarify tax obligations related to goods imported and sold within the United States, which is a legitimate exercise of federal power.

However, the implementation and enforcement of the law must adhere to due process and equal protection principles to ensure fairness and avoid arbitrary application, as guaranteed by the Fifth and Fourteenth Amendments.

Impact Assessment: Things You Care About

This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).