New link rule RLDet

Proposal for a Global Taxation System

– DAGTVA truth table –

DAGTVA® – The linkage rules of the taxation system

No. Problems exposed, requests, constraints and subjects Origin Pg Li Ref.
18 WST – Narrow definition, processing – direct / indirect collection of payment by MPF MTC 3 17 RLDet

MPF : Market Place Facilitator / provider

Quote: In the documentIntroduction page 3. « The 2018 White Paper (pp. 6-10) suggested both broad and narrow versions of the definition of the term “marketplace facilitator / provider” (1). The narrow definition requires direct or indirect processing or collection of the customer’s payment by the marketplace facilitator / provider. The broad definition may not » .

Narrow Definition page 12
« The narrow definition requires that the marketplace or forum list the market-place seller’s item on the marketplace and, directly or indirectly, take the customer’s payment and transmit payment to the marketplace seller » .
A recently enacted example of the narrow definition is contained in Maryland 2019 HB 1301, Section 1 (C-2) (1):

“Marketplace facilitator” means a person that:

(i) facilitates a retail sale by a marketplace seller by listing or advertising for sale in a marketplace tangible personal property; and

(ii) regardless of whether the person receives compensation or other consideration in exchange for the person’s services, directly or indirectly through agreements with third parties, collects payment from a buyer and transmits the payment to the marketplace seller.

This definition is similar to NCSL model Section 2 A. (Appendix A):

Comments: It is this version which is favored by MTC actors by : The model approved on November 22, 2019 by the National Conference of State Legislatures (NCSL) State and Local Tax (SALT) Task Force ( “NCSL model” ) , approved by the NCSLExecutive Committee inJanuary2020, suggests a narrow definition and includes certain exclusions.

About exclusions with DAGTVA, refer to the pageCASex.

Note: « Twenty-one States plus the District of Columbia have adopted narrow definitions.
Fifteen states have adopted broad definitions. Business participants in the Work Group expressed a strong preference for the narrow definition, because the broad definition leads to more uncertainty. »

We see, with the preceding remark, take shape with Wayfair Sale Tax, following the decision 17-494 Wayfair Inc, by the Supreme Court of United States, that the differences in application of the law between States will lead to difficulties which will be difficult to resolve especially when a State which applies the ‘narrow definition ‘ will ask a State which applies the ‘broad definition ‘ to return taxes to it when these are unknown!

DAGTVA favors this narrow definition for all transactions billed as : « National Conference of State Legislatures (NCSL) State and Local Tax (SALT) Task Force (NCSL model), and approved by the NCSL Executive Committee.

With DAGTVA and the ‘narrow definition‘ , all transactions producing an invoice are automatically declared to the tax authorities. These transactions are subject to the taxes assigned to them being returned to the State of consumption. It is the object of the law which will be the support of the DAGTVA proposal for a World Single Market inside a World Single Taxation).

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