NET FAIR Act

The New Economy Tax Fairness Act (NET FAIR Act) seeks to limit the ability of state and local governments to tax businesses that operate across state lines, particularly through the internet. Under this bill, a state could only impose income, sales, or use taxes on a business if that company maintains a "substantial physical presence" within the state’s borders.

For everyday citizens, this legislation would likely prevent states from collecting sales taxes on many online purchases made from out-of-state retailers who do not have physical stores or warehouses in the buyer's state. By clarifying that using an internet service provider or having an affiliated representative in a state does not count as a physical presence, the bill aims to create a uniform federal standard for interstate commerce taxation. While this could lead to lower costs for consumers shopping online, it would also restrict the tax revenue that state and local governments can collect from digital and remote transactions.