The Joint Cost of Collection Study is supposed to find the cost to collect sales and use tax. It seeks to “determine the costs under the current sales and use tax system and the effect on those costs - including costs shifted from vendors to state governments - of changes to the system proposed by the SSTP (Streamlined Sales Tax Project).”

According to Dan Bucks, executive director of the Multistate Tax Commission, and co chair of the study, sponsors want this to be a definitive study on sales and use tax collection costs.

The Multistate Tax Commission is an organization of state governments that works with taxpayers to administer, equitably and efficiently, tax laws that apply to multistate and multinational enterprises. Created by an interstate compact, the Commission. Forty-five States (including the District of Columbia) participate in the Commission, which says it: 'encourages tax practices that reduce administrative costs for taxpayers and States alike,
develops and recommends uniform laws and regulations that promote proper state taxation of multistate and multinational enterprises, encourages business compliance with state tax laws through education, negotiation and enforcement, and protects state fiscal authority in Congress and the courts.'

The sponsors expect that “The study will identify and analyze the factors contributing to the cost of collecting, remitting and administering sales and use taxes in sufficient detail so as to allow the impact of changes in various features of the tax administration process (e.g., those proposed by the SSTP) to be estimated.”

The SSTP is a project in which more than 40 states have developed a harmonised sales tax which would encourage Congress to overturn the Supremem Court ruling against the collection of remote sales taxes (it was based mostly on the impracticality of collection because of the variety of systems in use). Proponents of the SSTP hope that it can be associated with Congressional moves to extend the Internet tax moratorium, allowing states which buy into the SSTP's models to bypass a moratorium.

The new study is relevant because an important part of the SSTP is compensation to vendors for collecting tax. In order to initiate a plan for compensation, the SSTP first needs to know something about the costs incurred by retailers, so that there is a basis for determining the rate at which to set compensation.

Second, says Professor Hardesty, the cost and difficulty of collecting tax is one of the reasons for denying to states a mandate for requiring out-of-state vendors to collect tax. Though it has always been assumed that collecting tax is expensive, no one really knows. From a political point of view, if Congress has at hand actual knowledge of the cost of administering the sales and use tax system, it can make informed decisions regarding the powers states should have.