The Streamlined Sales and Use Tax Agreement (SSUTA) is an agreement created for states to “…assist states as they administer a simpler and more uniform sales and use tax system.” Each state has the opportunity to adopt the SSUTA and join the current 23 member states. Who will be next?
On April 7, the Massachusetts State Legislature’s Joint Committee on Revenue met and received testimony supporting H.B. 1695, a bill currently being considered that would allow Massachusetts to join the SSUTA. According to the ICSC (International Council of Shopping Centers), this “…is a critical step in leveling the playing field between community-based retailers and online retailers. As a member state, Massachusetts would be positioned to collect sales tax from remote sellers once Congress passes enabling legislation, known as the Main Street Fairness Act.”
According to their website, the Streamlined Sales Tax (SST) Governing Board has created this effort to “…find solutions for the complexity in state sales tax systems that resulted in…” the court ruling that “…a state may not require a seller that does not have a physical presence [nexus] in the state to collect tax on sales into the state (Bellas Hess v. Illinois and Quill Corp. v. North Dakota).” According to the SST Governing Board, this determination was made because, according to the court, “…the existing system was too complicated to impose [sales tax] on a business that did not have a physical presence in the state.”
The SSUTA was created to “simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance.” The focus is to improve the processes for all sellers and all types of commerce–an issue that is coming to the forefront with large e-commerce based businesses refusing to collect sales tax from their purchasers, and ending relationships with their affiliates due to the nexus ruling, big box and small business arguing for collection of sales tax and a multitude of other discussions regarding collection and remittance of sales and use taxes.
It appears, though, that everyone on all sides would appreciate a controlled, uniform approach to sales tax application and compliance rather than the state-by-state discussions. According to CNET, Amazon’s Paul Misener, vice president of public policy, “…says his employer isn’t necessarily opposed to such legislation–as long as it’s crafted very carefully. ‘We’ve long supported a truly simple, nationwide sales tax system, evenhandedly applied.'”
Regardless of how the day ends, there are currently nearly half of the members of the United States of America who have adopted the SSUTA, so it bears learning more about the SST Governing Board. As for Massachusetts, it has been estimated that “…in 2012 Massachusetts cold lose between $269 million and $355 million in uncollected sales tax revenue” without the adoption of the SSUTA.
About the Author: Susan McLain has over 15 years experience in technical and marketing writing, graphic design, business development and marketing management. She currently works for Avalara, Inc., a Software-as-a-Service (SaaS) company providing automated solutions for sales and use tax compliance for small to medium businesses. You can follow Avalara at www.twitter.com/avalarasalestax or read additional blogs at blog.avalara.com.