You've probably seen references in the news to the Streamlined Sales and Use Tax Agreement (SSUTA) or the Streamlined Sales Tax Project (SSTP) - or simply SST. Perhaps you've wondered if this is something that you really need to consider, but just haven't had the time to research the issue.
We boil it down to the who, what, where & why...
The following content is an effort to make it faster and easier for businesses (as well as their tax advisors) to understand the SST issue and to help determine if it's something that needs further consideration.
We want to point out that this content is provided and maintained by CCH - a Certified Service Provider (CSP) of SST solutions. While significant efforts have been made to present both the advantages and considerations of conforming to SST, this publication is intended as general information only. As with all tax issues, it's important that you work with an experienced, independent tax professional in order to determine if it's the right solution for your company.
If any opinions or issues have been overlooked, we welcome comments, corrections or clarifications, and will gladly post them in this area. Our goal at Sales Tax Support (and CCH) is to make sales tax compliance easier for you and your business.
What is the Streamlined Sales and Use Tax Agreement (SSUTA)?
SSUTA is an effort to simplify sales and use tax and in the process reduce the costs and administrative burdens on businesses operating in multiple states. The agreement requires member states to comply through the use of consistent sourcing rules, definitions, methods, and protocols for the calculation, collection and reporting of sales/use tax. The agreement makes it easier for small businesses to figure out what rate of tax to pay - and dramatically reduces the importance of nexus debates in states that are participating.
What's the purpose of the Streamlined Sales and Use Tax effort?
Again, simplification. Currently, there are 46 states plus the District of Columbia that levy sales/use tax on the state and/or local levels. Each of these jurisdictions has an entrenched bureaucracy that employs its own definitions, rules, methods, procedures, and documentation (among other requirements) to administer these taxes. Consequently a multi-state taxpayer may need to follow at least 46 different protocols to remit and report sales/use tax. Furthermore, several states, including Alabama, Arizona, Colorado, and Louisiana have additional local reporting requirements, significantly increasing the number of mandatory tax return filings for taxpayers with nexus in these local jurisdictions. While Alaska has no state sales tax, many cities and jurisdictions within the state administer sales tax at the local level. Click here to access "Streamlined Sales Tax Status and Sourcing Rules Overview (as of August 5, 2013)" table
What if, in 24 states, the tax administration protocols were identical?
Currently, there are 22 Full Member SST states and 2 Associate Member States. This could potentially reduce the expense and time that both the taxpayers and the states devote to the cumbersome and complex challenges of sales tax compliance.
Note: This document incorporates research based on source and reference materials published by the Streamlined Sales Tax Governing Board, Inc. promoting a streamlined sales tax system for the 21st Century.
BTW - don't forget to check these other Streamlined Sales Tax (SST) resource pages on SalesTaxSupport.com:
- Can SST Streamline Sales Tax For Your Business?
- SST States & Sourcing Rules
- Advantages & Considerations
- Streamlined Sales Tax Agreement FAQs