HR 2001 IH

106th CONGRESS

1st Session

H. R. 2001

To promote freedom, fairness, and economic opportunity for families by repealing the income tax, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

IN THE HOUSE OF REPRESENTATIVES

May 26, 1999

Mr. TAUZIN (for himself, Mr. TRAFICANT, Mr. BRADY of Texas, Mr. CALLAHAN, Mr. CAMPBELL, Mrs. CHENOWETH, Mr. DEMINT, Mr. HALL of Texas, Mr. HEFLEY, Mr. HUNTER, Mr. LINDER, Mrs. MYRICK, Mr. NORWOOD, Mr. PACKARD, Mr. PETERSON of Minnesota, Mr. SCARBOROUGH, Mr. STUMP, Mr. TANCREDO, and Mr. BURTON of Indiana) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To promote freedom, fairness, and economic opportunity for families by repealing the income tax, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

`Chapter 1--Sales Tax

`SUBCHAPTER A--IMPOSITION OF TAX

`Sec. 1. Imposition of tax.

`Sec. 2. Exemptions.

`Sec. 3. Rules relating to collection and remittance of tax.

`SUBCHAPTER B--CREDITS; REFUNDS; INSTALLMENT PAYMENTS OF TAX ON PURCHASES OF RESIDENCES

`Sec. 11. Credits and refunds.

`Sec. 12. Installment payments of tax on purchase of principal residences.

`Sec. 13. Family consumption refund.

`SUBCHAPTER C--DEFINITIONS AND SPECIAL RULES; FINANCIAL INTERMEDIATION SERVICES

`Sec. 21. Definitions.

`Sec. 22. Special rules.

`Sec. 23. Determination of financial intermediation services amount.

`Sec. 24. Bad debts.

`Sec. 25. Timing of tax on financial intermediation services.

`Sec. 26. Alternative method for calculating tax due.

`Sec. 27. Basic interest rate.

`Sec. 28. Applicable interest rate.

`SUBCHAPTER D--AUTHORITY FOR STATES TO COLLECT TAX

`Sec. 31. Authority for States to collect tax.

`Sec. 32. Federal administrative support for States.

`Sec. 33. Federal administration option for multistate vendors.

`Sec. 34. General administrative matters.

`SUBCHAPTER E--OTHER ADMINISTRATIVE PROVISIONS

`Sec. 41. Monthly reports and payments.

`Sec. 42. Records.

`Sec. 43. Registration.

`Sec. 44. Certificate.

`Sec. 45. Penalties.

`Sec. 46. Burden of persuasion and burden of production.

`Sec. 47. Attorneys and accountancy fees.

`Sec. 48. Appeals.

`Sec. 49. Taxpayer subject to subpoena on production.

`Sec. 50. Tax Court jurisdiction.

`Sec. 51. Power to levy.

`Sec. 52. Problem resolution officers.

`Sec. 53. Jurisdiction and interstate allocation.

`Sec. 54. Tax to be stated and charged separately.

`Sec. 55. Installment agreements; compromises.

`Sec. 56. Accounting.

`Sec. 57. Hobby activities.

SEC. 2. CONGRESSIONAL FINDINGS.

SEC. 3. REPEAL OF THE INCOME TAX, ESTATE AND GIFT TAXES, AND CERTAIN EXCISE TAXES.

SEC. 4. SALES TAX.

`CHAPTER 1--SALES TAX

`SUBCHAPTER A. Imposition of tax.

`SUBCHAPTER B. Credits; refunds; installment payments of tax on purchases of residences.

`SUBCHAPTER C. Definitions and special rules; financial intermediation services.

`SUBCHAPTER D. Authority for States to collect tax.

`SUBCHAPTER E. Other administrative provisions.

`Subchapter A--Imposition of Tax

`Sec. 1. Imposition of tax.

`Sec. 2. Exemptions.

`Sec. 3. Special rules relating to collection and remittance of tax.

`SECTION 1. IMPOSITION OF TAX.

`SEC. 2. EXEMPTIONS.

`SEC. 3. RULES RELATING TO COLLECTION AND REMITTANCE OF TAX.

industry or products are such that consumers buy 25 percent or more of the product sold by the industry or the product. A registered vendor may by application for good cause shown elect to opt out of the application of this paragraph.

`For credit to purchaser where seller collects tax on exempt purchase, see section 11(a)(3).

`For tax to be separately stated and charged, see section 54.

`For obligation of government units, see section 3(a)(1).

`Subchapter B--Credits; Refunds; Installment Payments of Tax on Purchases of Residences

`Sec. 11. Credits and refunds.

`Sec. 12. Installment payments of tax on purchases of principal residences.

`Sec. 13. Family Consumption Refund.

`SEC. 11. CREDITS AND REFUNDS.

providing that the equity ratio so calculated cannot be less than zero or greater than one.

`SEC. 12. INSTALLMENT PAYMENTS OF TAX ON PURCHASE OF PRINCIPAL RESIDENCES.

period beginning on the date of the cessation referred to in paragraph (1); and

`SEC. 13. FAMILY CONSUMPTION REFUND.

members (as defined in subsection (e)) sharing a common residence shall be considered part of one integrated family unit.

Social Security Administration by the amount of Family Consumption Rebate provided in employee paychecks.

`Subchapter C--Definitions and Special Rules; Financial Intermediation Services

`Sec. 21. Definitions.

`Sec. 22. Special rules.

`Sec. 23. Determination of financial intermediation services amount.

`Sec. 24. Bad debts.

`Sec. 25. Timing of tax on financial intermediation services.

`Sec. 26. Alternative method for calculating tax due.

`Sec. 27. Basic interest rate.

`Sec. 28. Applicable interest rate.

`SEC. 21. DEFINITIONS.

if such property or service is purchased by a person in an active trade or business for the purpose of employing or using such property or service in the production or sale of other taxable property or services in the ordinary course of that active trade or business.

`SEC. 22. SPECIAL RULES.

for 50 percent or less of its fair market value at the end of the lease term.

method. Reasonable records must be maintained to support a taxpayer's business use of the mixed use property or service.

`SEC. 23. DETERMINATION OF FINANCIAL INTERMEDIATION SERVICES AMOUNT.

`SEC. 24. BAD DEBTS.

`For tax on subsequent payments, see section 11(g)(3).

`SEC. 25. TIMING OF TAX ON FINANCIAL INTERMEDIATION SERVICES.

or debt shall be calculated and collected with the same frequency that statements are rendered by the financial institution in connection with the investment account or debt but not less frequently than quarterly.

`SEC. 26. ALTERNATIVE METHOD FOR CALCULATING TAX DUE.

`SEC. 27. BASIC INTEREST RATE.

`SEC. 28. APPLICABLE INTEREST RATE.

`Subchapter D--Authority for States to Collect Tax

`Sec. 31. Authority for States to collect tax.

`Sec. 32. Federal administrative support for States.

`Sec. 33. Federal administration option for multi-State vendors.

`Sec. 34. General administrative matters.

`SEC. 31. AUTHORITY FOR STATES TO COLLECT TAX.

administrative credit) and section 13 (relating to the family consumption refund)), and

`SEC. 32. FEDERAL ADMINISTRATIVE SUPPORT FOR STATES.

`SEC. 33. FEDERAL ADMINISTRATION OPTION FOR MULTISTATE VENDORS.

`SEC. 34. GENERAL ADMINISTRATIVE MATTERS.

reversal of prior law and new law) shall be retroactive in effect.

Small Business Administration shall submit comments on such regulation to the Secretary.

`Subchapter E--Other Administrative Provisions

`Sec. 41. Monthly reports and payments.

`Sec. 42. Records.

`Sec. 43. Registration.

`Sec. 44. Certificates.

`Sec. 45. Penalties.

`Sec. 46. Burden of persuasion and burden of production.

`Sec. 47. Attorneys and accountancy fees.

`Sec. 48. Appeals.

`Sec. 49. Taxpayer subject to subpoena on production.

`Sec. 50. Tax Court jurisdiction.

`Sec. 51. Power to levy.

`Sec. 52. Problem resolution officers.

`Sec. 53. Jurisdiction and interstate allocation.

`Sec. 54. Tax to be separately stated and charged.

`Sec. 55. Installment agreements; compromises.

`Sec. 56. Accounting.

`Sec. 57. Hobby activities.

`SEC. 41. MONTHLY REPORTS AND PAYMENTS.

`SEC. 42. RECORDS.

`SEC. 43. REGISTRATION.

`SEC. 44. CERTIFICATE.

`SEC. 45. PENALTIES.

`SEC. 46. BURDEN OF PERSUASION AND BURDEN OF PRODUCTION.

purchaser with respect to such purchase, then the burden of production of documents and records relating to that exemption shall rest with the purchaser and not with the seller.

`SEC. 47. ATTORNEYS AND ACCOUNTANCY FEES.

`SEC. 48. APPEALS.

`SEC. 49. TAXPAYER SUBJECT TO SUBPOENA ON PRODUCTION.

`SEC. 50. TAX COURT JURISDICTION.

`SEC. 51. POWER TO LEVY.

`SEC. 52. PROBLEM RESOLUTION OFFICERS.

`SEC. 53. JURISDICTION AND INTERSTATE ALLOCATION.

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 the final destinations).

`SEC. 54. TAX TO BE STATED AND CHARGED SEPARATELY.

`SEC. 55. INSTALLMENT AGREEMENTS; COMPROMISES.

`SEC. 56. ACCOUNTING.

`For rules relating to bad debts for vendors electing the accrual method, see section 11(g).

`SEC. 57. HOBBY ACTIVITIES.

SEC. 5. PHASE-OUT OF THE INTERNAL REVENUE SERVICE.

SEC. 6. SOCIAL SECURITY ADMINISTRATION TO COLLECT PAYROLL TAXES.

For revised rules relating to the self-employment tax, see section 7 of this Act.

For rules relating to revised withholding tax schedules and family consumption refund, see section 13.

SEC. 7. SELF-EMPLOYMENT TAX.

SEC. 8. SOCIAL SECURITY BENEFITS INDEXED ON SALES TAX INCLUSIVE BASIS.

SEC. 9. COMPENSATING PAYMENTS TO CERTAIN PERSONS ON FIXED INCOME.

SEC. 10. INTEREST.

SEC. 11. SUPERMAJORITY REQUIRED TO RAISE RATE.

END