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SST’s Billion Bucks... Is It Enough? (What Do You Think?)

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The Streamlined Sales Tax Governing Board (“SSTGB”) recently announced that since inception, SST has helped states collect more than $1 billion in new sales tax revenue.  I have decided to take a short break from my multi-series blog to solicit some feedback on the current state of SST. 

Is $1 Billion of Collection Really All That Good?

For the fiscal year that begins July 1, 2012 (2013 Fiscal Year), states are projecting a record budget deficit of more than $49 billion.  Streamlined Sales Tax has been around since the early 2000’s (give or take a couple of years for states ironing out laws and really getting their systems up and running in order to comply with the agreement).  If we take a conservative approach and say that SST really gained momentum around 2004 (this blogger believes that it really gained momentum in late 2003 to early 2004) that amounts to annual collections of about $125 million per year across all SST states.

So I pose the question to the business and/or tax community. Is $1 billion dollars enough?  Does this justify the efforts that SST has made in simplifying sales and use tax law? Does it give Congress the correct signal that it should intercede and create federal law that will allow states to impose tax collection requirements on remote sellers?

Laws Come and Laws Go

Remember that at its heart, SST is just a guideline.  It is not now, nor has it ever meant to be, a set of laws that each SST state must implement. Rather, it provides a very standard framework for states to adopt that will allow them to simplify their laws, collections and remittance requirements.

The states that have adopted this effort and have reworked their laws to comply with the agreement are undoubtedly receiving benefit from their efforts.  However, Congress has entertained at least 2 pieces of legislation (thus far) that would not give SST precedence but would rather relax the federal and constitutional concerns currently imposed upon states when it comes to requiring remote sellers to collect their tax thereby allowing a state to circumvent SST altogether and still impose its tax on remote sellers.

Is this the end of SST as we know it?  Have many people spent the better part of a decade working on an effort that may be easily pushed aside by the broad stroke of a pen?

Probably not, to be frank.  While SST itself may not become the law of the land in the face of current federal legislation around sales and use tax, it has definitely shown many stakeholders that a focused effort by state governing bodies can work and should be explored to address our current fiscal crisis.  But all the same, I would like to get feedback from the business and/or tax community. What are your thoughts?  Are we seeing the beginning of the end for the Streamlined Sales Tax Project?  Please add your comments or questions below...

Stay tuned for the next installment in my multi-part series: "Streamlined Sales Tax; From Registration to Maintenance"

BTW - In addition to our SST blog posts - don't forget to check these other Streamlined Sales Tax (SST) resource pages on SalesTaxSupport.com:

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Other recent “Streamlined Sales Tax (SST)” posts by Cory Barwick:

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Comments

1 Responses to SST’s Billion Bucks... Is It Enough? (What Do You Think?)

  • Posted by Ken on May 7, 2012 5:34am:

    I disagree, Cory. SST was more than just a guideline -- it was and still is an effort by NCSL, NGA and the rest of the "Big Seven" state associations to stave off federal preemption. It has achieved that objective admirably for over a decade now.
    Predictably, it has not produced what the NTA Tax Project called for in 1998, which was "radical simplification" that would justify a reconsideration of the Quill case's physical presence standard.
    You're right -- $1.0 billion is a drop in the bucket compared to the revenue lost due to uncollected sales and use taxes. SST's failure to make a meaningful dent in the tax gap ought to convince Congress that preemption is the only solution.
    BTW -- both e-biz and brick-and-mortar retail would LOVE preemption of all state and local transaction taxes, and their replacement by a national sales tax regime. They are smart enough to realize that (1) tax free sales only produce a short term competitive advantage -- such as Dell and Amazon; and (2) sales tax is the purchaser's expenses, as long as the sellers don't screw up and fail to collect it.

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