Streamlined Sales Tax Project

Organized in March 2000, the Streamlined Sales Tax Project (SSTP) objective is to simplify and modernize sales and use tax collection and administration in the United States. It arose in response to efforts by Congress to permanently prohibit states from collecting sales taxes on online commerce. Because such a ban would have serious financial consequences for states, the SSTP began as an effort to try to minimize the many differences between the sales tax policies and practices of states.

In prior decisions regarding mail order sales, the U.S. Supreme Court ruled in 1992 (in the case of Quill Corp. v. North Dakota, 504 U.S. 298) that mail-order retailers were not compelled to collect use tax and remit the tax to states, in part because of the complexities of doing so. With computers, however, the difficulties of doing so are much smaller today, so the remaining stumbling block lies in the variations among state sales taxes. Organizers of the SSTP hope that by ironing out differences among state taxation levels, they will remove a major roadblock to the collection of taxes on online sales and convince Congress and the courts to allow them to collect these taxes regularly.

As of September 2005, there are 44 participating states, including Washington, D.C. There are 15 full member states (Indiana, Iowa, Kansas, Kentucky Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, Rhode Island, South Dakota, Vermont, and West Virginia), which are states in compliance with the Streamlined Sales and Use Tax Agreement through its laws, rules, regulations, and policies. And six associate member states (Arkansas, Nevada, Ohio, Tennessee, Utah and Wyoming), which are states in compliance with the Streamlined Sales and Use Tax Agreement except that its laws, rules, regulations and policies to bring the state into compliance are not in effect but are scheduled to take effect on or before January 1, 2008, or (b) a State that has achieved substantial compliance with the terms of the Streamlined Sales and Use Tax Agreement taken as a whole, but not necessarily each provision, and there is an expectation that the state will achieve compliance by January 1, 2008.

The SSTP is setting up a system by which Internet e-commerce companies can voluntarily pay state taxes to the states in which their customers reside. The incentive the SSTP is offering companies is rather than try to work out how much tax a company owes for each locality they can instead use a CSP (certified service providers). In addition, "the states that are in compliance with SSUTA (Member States) will offer advantages to those sellers who use a CSP. Three companies, Avalara, Exactor, and Taxware, have been designated Certified Service Providers for the SST project.

One such advantage is that the states will offer amnesty "from assessment for uncollected or unpaid sales or use taxes together with interest or penalty for sales made during the period the seller was not registered in that state." Effective June 1, 2006 the Executive Committee of the Streamlined Sales Tax Governing Board has determined that there are adequate Certified Service Provider and Certified Automated System services available.

External links

• Streamlined Sales Tax Project home page
• Open Source Implementation by the Vermont Department of Taxes
• List of states participating in SSTP
• Avalara company page
• Exactor company page
• ADP Taxware company page
• NetChoice
• CCH, a WoltersKluwer Business