Additionally, both New York’s Department of Taxation and Finance and California’s State Board of Equalization have released studies indicating that, with regard to their state economies, membership in the SSUTA may not result in revenue increases. Experience has shown that it would be very difficult to quantify what Connecticut could expect from becoming a member state.
If a term defined in the Library of Definitions appears in a member state’s sales and use tax statutes or administrative rules or regulations, the member state shall enact or adopt the Library definition of the term in its statutes or administrative rules or regulations in substantially the same language as the Library definition. A member state shall not use a Library definition in its sales or use tax statutes or administrative rules or regulations that is contrary to the meaning of the Library definition. Except as specifically provided in Section 316 and the Library of Definitions, a member state shall impose a sales
or use tax on all products or services included within each definition or exempt
products or services within definitions, product definitions
and sales tax holiday definitions.
of Definitions The Library of
from sales or use tax all includes administrative Definitions can be found
in Appendix C of the SSUTA which is in as Appendix B Director of the Department of Revenue Services feel
of this that a
report. The Commissioner and Legal large rewrite of Chapter 219 of the
Connecticut General Included as Appendix under the SSUTA.
Statutes C, is the
would be required in order to come into compliance with the SSUTA. current Connecticut tax treatment of product definitions versus treatment
Under the SSUTA, each member state is charged with lessening the difficulties faced by sellers when there is a change in a state sales or use tax rate or base. It requires that each state make a reasonable effort to provide sellers with as much advance notice as practicable of a rate change, limit the effective date change to the first day of a calendar quarter and notify sellers of legislative changes in the tax base and amendments to sales and use tax rules and regulations.
The SSUTA calls for vendors who participate to be given compensation for collecting taxes. Connecticut is currently one of twenty states who do not provide a vendor allowance for the collection and remittance of the sales tax.
Finally, a replacement tax is a tax that is levied by a state on a specific item of tangible personal property or taxable service that functions in an identical fashion to traditional sales and use tax. In most cases, replacement taxes are enacted by states as a result of the SSUTA uniform tax rate and/or uniform base requirements; they are intended to maintain member state’s “pre-streamlined” tax rate or tax base that would not otherwise conform to the SSUTA and are not labeled a sales tax. While a replacement tax for room occupancy has not caused controversy, Minnesota and New Jersey have enacted replacement taxes on fur clothing that has been controversial. An amendment to the SSUTA prohibiting replacement taxes was rejected by member states, but to date, this issue has not reached final resolution.
In order to move forward, Connecticut would have to deal with the prohibition of multiple rates and the prohibition of exemptions based on the value of an item. If it is decided that it is in Connecticut’s best interest to participate, the executive and legislative branches of government need to reach consensus on these issues. If it is decided that it is in Connecticut’s best interest to participate, the state would need to
impact will be
to estimate what the revenue impact based on the tax rate and base, it
recommendation 1 be completed first. The primary goal of the SSTP was to remote sales on the states that enact
convince Congress to confer collection authority over the streamlined system on the theory that the system