Key features of the project include:
Uniform definitions within tax laws. While Legislatures still choose what is taxable or exempt in their state, common definitions of key items in the tax base will be used.
Rate simplification. States will be circumstances (food and drugs). Sales
allowed one state taxes applied after
rate and a second rate in limited dollar thresholds or up to dollar caps
would have to be eliminated. State administration of all state and local sales and use taxes. have to file returns with each local government within a state.
Business will no longer
Uniform sourcing rules. The states will have uniform and simple rules for how they will source transactions. The rules will be destination/delivery based and, with few exceptions, uniform for tangible personal property, digital property and services. Simplified exemption administration for use and entity based exemptions. Sellers will be
relieved of the “good tax. Purchasers will
faith” requirements that exist be responsible for paying the
will no longer be liable for uncollected interest and penalties for claiming the
incorrect exemptions. Uniform audit procedures. Sellers who participate will be subject to audits and states may conduct joint audits of large multi-state businesses. State funding of the system. To reduce the financial burdens on sellers, responsibility for funding some of the technology models.
of a limited scope,
states will assume
Governance of the Streamlined Sales Tax Project
The Governing Board of the Streamlined Sales Tax Project is comprised of 22 states, 17 full member states which include Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, Rhode Island, South Dakota, Vermont, West Virginia and Wyoming. Additionally, there are 5 associate member states on the Governing Board including, Nevada, Ohio, Tennessee, Utah and Washington. These states either had future effective dates for compliance in their legislation or had to rework some part of their law to come into full compliance. However, these associate states are not allowed to vote on certain issues.
The Governing Board is governed not only by the Streamlined Sales and Use Tax Agreement (SSUTA) but also by a set of bylaws. The Board is comprised of up to four representatives from each member state, with each state receiving only one vote. The Governing Board is charged with interpretations and amendments to the Streamlined Sales and Use Tax Agreement. Any interpretation or amendment must be adopted by a three-quarters vote of the board. The board also certifies tax technology systems and service providers for the collection and remittance of the sales and use tax; it reviews state compliance with the SSUTA, it implements vendor compensation and contracts, it governs multi- state audit procedures and it handles dispute resolution. Associate member states on the Governing Board are not allowed to vote on amendments to or interpretations of the SSUTA or on whether a
petitioning state is in compliance with the SSUTA.
The Governing Board is advised by a State and Local Advisory Council (SLAC) as well as a Business Advisory Council (BAC). While SLAC provides a forum for state and local government officials not represented on the Governing Board to express their ideas and concerns, BAC provides a forum for the private business sector to express theirs. Both councils also have a formal process to bring concerns to the Governing Board. Additionally, both are charged with advising the Governing Board on matters pertaining to the administration of the SSUTA, including admission of states into membership, noncompliance, interpretations, and revisions or additions to the SSUTA. Both are also charged with seeking the advice and response of the other prior to formulating a recommendation to the Governing Board or its committees.