Most businesses of any size send sales people to travel in many of the 50 states as well as all over the world. So they would be subject to audit for their Holiday Inn room bill in Wenatchee, Washington as well as their lobster dinner in Kennebunkport, ME.
That brings up another point, business expenses spent in a foreign country (Like a german trade show) are currently deductible from a business' profits. I guess with no income taxes it really doesn't matter about the foreign expenses, there will be no tax forms to record these items on anyway.
This no income tax stuff is hard to grasp the way it will all actually work.
If you're not paying tax, the burden of showing the motel acted correctly in not taxing you would be on the motel (unless you were using a bogus tax exemption). Those sorts of things are often handled by state sales tax offices now,
My bet on the paying tax/not paying tax in this sort of example would be to agree with ancient_geezer as the best solution and the most in harmony with the FairTax concept. I think that this wording from the bill certainly seems to cover the situation:
`In all disputes concerning taxes imposed by this subtitle, the person engaged in a dispute with the sales tax administering authority or the Secretary, as the case may be, shall have the burden of production of documents and records but the sales tax administering authority or the Secretary shall have the burden of persuasion. In all disputes concerning an exemption claimed by a purchaser, if the seller has on file an intermediate sale or export sale certificate from the purchaser and did not have reasonable cause to believe that the certificate was improperly provided by the purchaser with respect to such purchase (within the meaning of section 103), then the burden of production of documents and records relating to that exemption shall rest with the purchaser and not with the seller."`SEC. 506. BURDEN OF PERSUASION AND BURDEN OF PRODUCTION.
To me, that seems to be saying a resale certification ticket and of course there are both civil and criminal penalties for bogus activity in this regard. I would think that eventually there would even be a common form used among all states.
BTW, keep in mind my earlier caution to you about Nightie as I see he's trying to direct you to a hitpiece by the liberal left opposing dynamic models (which the FairTax opponents violently oppose since the FairTax has obvious benefits under dynamic analysis). I'd even be careful in trying to understand the very complex economic model mentioned by Jorgenson & Wilcoxen since these are easily misunderstood (and in fact Nightie has put out some incorrect analysis of this very model in past threads).