Sales Tax Program Surmounts Adoption Barrier

by Mike Godfrey, Tax-News.com, New York

11 July 2003

It now seems clear that with 20 US states having passed SSUTA (Streamlined Sales and Use Tax Agreement) legislation, the scheme will be adopted next April when many of the recently-passed laws come into effect.

The standard wording adopted by the laws passed so far prescribes that the SSUTA must be adopted by at least 10 states, with residents representing at least 20% of the populations of states that collect sales tax, before they come into effect. Now that the hurdle appears to have been jumped, the SSTP's Governing Board, which must certify whether each state is in compliance with the SSUTA. Also needed before next April is certification of automated tax collection systems, one of the most important features of the new tax regime.

Now that the states have achieved what many people said they would never manage - the prospective simplication of the nation's tangle of contradictory sales and use tas laws - Congress can hardly refuse permission for the states to impose taxes on cross-border sales. It's this more than anything else that has kept the Internet a tax-free zone. (The moratorium on Internet taxes affects access taxes, not sales taxes.)

The states which have passed SSUTA legislation are: Arkansas, Indiana, Iowa, Kansas, Kentucky, Minnesota, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Taxas, Utah, Washington, West Virginia, Wyoming.

The population of these 20 states amounts to 20.8% of the total. Ten other states have enabling legislation in progress. Only in three states has legislation been actively blocked.

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