Senators hear proposal to let retailers keep a percentage of sales tax to offset collection costs

Senator Rest introduced Senate File 44 on Feb. 26, asking the Taxes Committee to consider a vendor collection allowance that would let retailers retain a small percentage of the sales tax they collect to offset the costs of collecting and remitting the tax.

The bill would add a definition for "net liability," permit retailers to retain a percentage of sales tax in recognition of the administrative burden of collection, and scale the allowance based on levels of sales. It also would exclude taxes otherwise paid by a retailer from eligibility for the allowance, and it sets a calculation for the minimum remittance amount that a retailer must pay to claim the allowance.

Why it matters: Proponents said the allowance would recognize real costs borne by small businesses and would bring…