The Fair Tax Act, Part XXV
My apologies for not posting earlier. My wife has been ill and work has been pretty crazy, but I have a little time here so I will add some more Fair Tax Bill to the pile. The next section of the bill is fairly regulatory so I won’t comment on it much. It is a bit lengthy, but I feel like I might as well post the whole bit, since all the items are similar.
`SEC. 405. INTERSTATE ALLOCATION AND DESTINATION DETERMINATION.
`(a) Destination Generally- The tax imposed by this subtitle is a destination principle tax. This section shall govern for purposes of determining–
`(1) whether the destination of taxable property and services is within or without the United States, and
`(2) which State or territory within the United States is the destination of taxable property and services.
`(b) Tangible Personal Property- Except as provided in subsection (f) (relating to certain leases), the destination of tangible personal property shall be the State or territory in which the property was first delivered to the purchaser (including agents and authorized representatives).
`(c) Real Property- The destination of real property, or rents or leaseholds on real property, shall be the State or territory in which the real property is located.
`(d) Other Property- The destination of any other taxable property shall be the residence of the purchaser.
`(e) Services-
`(1) GENERAL RULE- The destination of services shall be the State or territory in which the use or consumption of the services occurred. Allocation of service invoices relating to more than 1 jurisdiction shall be on the basis of time or another method determined by regulation.
`(2) TELECOMMUNICATIONS SERVICES- The destination of telecommunications services shall be the residence of the purchaser. Telecommunications services include telephone, telegraph, beeper, radio, cable television, satellite, and computer on-line or network services.
`(3) DOMESTIC TRANSPORTATION SERVICES- For transportation services where all of the final destinations are within the United States, the destination of transportation services shall be the final destination of the trip (in the case of round or multiple trip fares, the services amount shall be equally allocated among each final destination).
`(4) INTERNATIONAL TRANSPORTATION SERVICES- For transportation services where the final destination or origin of the trip is without the United States, the service amount shall be deemed 50 percent attributable to the United States destination or origin.
`(5) ELECTRICAL SERVICE- The destination of electrical services shall be the residence of the purchaser.
`(f) Financial Intermediation Services- The destination of financial intermediation services shall be the residence of the purchaser.
`(g) Rents Paid for the Lease of Tangible Property-
`(1) GENERAL RULE- Except as provided in paragraph (2), the destination of rents paid for the lease of tangible property and leaseholds on such property shall be where the property is located while in use.
`(2) LAND VEHICLES; AIRCRAFT, WATER CRAFT- The destination of rental and lease payments on land vehicles, aircraft and water craft shall be–
`(A) in the case of rentals and leases of a term of 1 month or less, the location where the land vehicle, aircraft, or water craft was originally delivered to the renter or lessee; and
`(B) in the case of rentals and leases of a term greater than 1 month, the residence of the renter or lessee.
`(h) Allocation Rules- For purposes of allocating revenue–
`(1) between or among administering States from taxes imposed by this subtitle or from State sales taxes administered by third-party administering States, or
`(2) between or among States imposing conforming State sales taxes,
the revenue shall be allocated to those States that are the destination of the taxable property or service.
`(i) Federal Office of Revenue Allocation- The Secretary shall establish an Office of Revenue Allocation to arbitrate any claims or disputes among administering States as to the destination of taxable property and services for purposes of allocating revenue between or among the States from taxes imposed by this subtitle. The determination of the Administrator of the Office of Revenue Allocation shall be subject to judicial review in any Federal court with competent jurisdiction. The standard of review shall be abuse of discretion.
This is just a laundry list of rules regarding where the destination of tax is (since the FairTax is destination-specific tax). This determines which state treasury/tax authority is in charge of taxation for any particular purchase/rent/whatever. This list just disambiguates (is that a word?) a number of situations where there might be a dispute. Any questions?
disambiguate:
to establish a single semantic or grammatical interpretation for
Cool. Glad to know I wasn’t making up new words.