Sporting Goods Excise Tax Modernization Act
The Sporting Goods Excise Tax Modernization Act would expand who is responsible for the excise tax on sporting goods imported into the United States when sold through online marketplaces. Specifically, it adds a new provision to treat certain marketplace providers (platforms that host/list products and collect payments) as the importer and seller for purposes of the excise tax on those sporting goods, when the sale involves a shipment from outside the United States and the marketplace provider is not the manufacturer. This shifts tax liability away from the purchaser and, in some cases, away from the seller/manufacturer, onto the marketplace platform itself. The change would apply to sales in calendar quarters beginning after 60 days from enactment, and the bill directs agencies to issue regulations to implement it.
Key Points
- 1New rule: Certain online marketplace providers will be treated as the importer and seller for purposes of the sporting goods excise tax when a taxable sporting good is sold through the marketplace and shipped from outside the U.S.
- 2Criteria for application: The sale must involve a marketplace provider hosting/listing the item, collecting gross receipts, and the manufacturer is not the marketplace provider; the item must be transported to the U.S. in connection with the sale.
- 3Scope of “marketplace provider”: A party whose business is hosting or facilitating product listings/advertisements and collecting receipts that are transmitted to the seller.
- 4Related parties: Related persons are treated as one person for applying the new rules (to prevent split or fragmented treatment across affiliated entities).
- 5Exceptions and guidance: The rule does not apply if another person would be taxed under the existing sporting goods excise tax; the Secretary would issue regulations or guidance to implement the provision, including identifying which entity is the marketplace provider for purposes of the rule.
- 6Effective date: Applies to sales in calendar quarters beginning after 60 days after enactment.