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Uniform sales tax agreement paves way for levies on Internet purchases - Page 2

© Alan Kotok

A group called the Streamlined Sales Tax Project or SSTP crafted the proposal. The SSTP says the simplified system reduces the number of sales tax rates, brings uniformity to definitions of items in the sales tax base, significantly reduces the paperwork burden on retailers, and incorporates new technology to modernize many administrative procedures.

A pilot project to test the collection mechanisms of the new system has been in operation for about a year. The pilot project tested software that assumes responsibility for determining, collecting, and remitting the use tax owed on a transaction. Four states -- Kansas, Michigan, North Carolina, and Wisconsin -- awarded contracts to companies to provide the software.

Ten states need to approve

The issue now moves to the individual states. The SSTP says according to the agreement, state legislatures can begin immediately to consider and pass legislation to implement the agreement and bring their state into compliance with its provisions. However, the agreement does not become binding and take effect until 10 states making up at least 20 percent of the total population of states with a sales tax have approved the agreement.

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Links:

National Governors Association, http://www.nga.org/

Streamlined Sales Tax Project, http://www.geocities.com/streamlined2000/

Internet Tax Nondiscrimination Act, http://thomas.loc.gov/cgi-bin/bdquery/z?...

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