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.|
|19||WST – large Definition – treatment / direct collection / indirecte payment by MPF||MTC||3||35||RLDli|
MPF : Market Place Facilitator / provider
Quote: To quote the document – Introduction page 3. « The 2018 White Paper (pp. 6-10) suggested both broad and narrow versions of the definition of the term “marketplace facilitator / provider”. 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.
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.
Also, a business falling within the broad definition that does not directly or indirectly process or collect the payment cannot practically comply with the tax collection requirement. Some business participants have advocated for adoption of exclusions from the definition for certain industries, such as payment processors, advertisers, delivery services, travel and accommodation services, car rentals, etc. Some of the states have included exclusions in their definitions of “marketplace facilitator / provider. ”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.
The exclusions typically address situations where the type of business falling within the definition lacks access to the sales transaction information and the payment so cannot practically comply, or the industry already has an established tax compliance model in place that would otherwise be disrupted.
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.
The exclusions typically relate to situations where the type of business falling within the definition does not have access to sales transaction information and therefore payment can hardly be compliant, or the industry already has a tax compliance model in place that would otherwise be disturbed .
The states which have chosen this ‘ broad solution ‘ will find themselves with an unmanageable tax refund system, where there will only be companies which will seek by various means to pass in the areas of exclusions, arguing that they do not have the opportunity to comply with the law. Other companies will say that they do not have access to sales information and to add when it is not the State of these companies that will seek not to return the taxes to the market State.
About exclusions with DAGTVA, refer to the page: CASex.
It can be seen from what was decided in its decisions in Appendix A of the MTC document , that the exclusions are such that this law: Wayfair Sale Tax, decision 17-494 Wayfair Inc, will ask of huge application problems while the DAGTVA system has no binding and execution threshold constraints between States.