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Dear Streamlined Sales Tax… Where Have You Been?

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It’s been a quiet couple of months related to Streamlined Sales Tax but don’t think that means all is “quiet” with the SST Governing Board.  The Board, Member states and the CSP group are collectively working together these days to address, as you might expect, changes necessary to the SST Agreement to accommodate for Marketplace Fairness Act, but more on that a little later.  For now, let’s start with a brief update of the topics already reported.

Maine looked to be set to sign on the dotted line with SST earlier this year with the introduction of LD 319 until it was vetoed by Gov. LePage on May 17 (originally reported in Hey Maine! Ready to Simplify Sales Tax?).  LePage cited concerns about the state’s participation in SST, which would have been required under the legislation.  Closely following that veto, LD 349 was signed into law on June 7 and contains all of the same provisions of LD 319 but picks up language that directs the state to undertake a study to look at alternative simplification measures to gain remote collection authority under the MFA.  So it looks like SST no longer looms on the horizon for ME, at least not in the short-term.

Earlier this year, Oregon released a joint resolution that, if enacted, would grant the state the authority to begin imposing a general sales and use tax for the first time in its history.  The resolution would also permit the state to enter into the Streamlined Sales and Use Tax Agreement (originally reported in Oregon Sales Tax? Say it ain’t so!).  The state continues to hold hearings on the overall tax reform measures contained within the resolution (yeah…  it’s not just about sales tax…) and Oregonians should see this measure on the ballot during the next general election.

Tax professionals and taxpayers alike did a small back flip when Missouri announced that it too was beginning to explore what it would mean, and then take, for the state to come into compliance with SST and / or the Marketplace Fairness Act.  Yes, you read that correctly, Missouri wants to explore simplification of the state’s sales and use tax law!!  Unfortunately, the bill was short-lived and was vetoed by the Gov. Nixon’s office in June but not specifically for the SST and MFA provisions, which Nixon publicly supports.  Rather, the Governor took issue with portions of the bill that would decrease the state’s income tax rate by 0.5% in expectation of the incoming sales tax revenue.  The governor’s office has already included revenue from online sales tax collection in the state’s 2014 budget but has not commented on the expected amount or how the state intends to get there.  So, hang tight Missouri, sounds like your government is still working on the misery of Missouri sales tax.

Now the elephant in the room: What’s the Streamlined Sales Tax Governing Board doing?  As mentioned already, SST, its member states and the collective Certified Service Provider group are actively working the Marketplace Fairness Act circuit.  What started as a mission to get traction on federal intervention to vastly different sales tax law has now taken on a mission of educating Congress and taxpayers about what MFA means to business, both the good and the bad, and what still needs to be done to ease continued fear about collection requirements.  With MFA somewhat locked in Committee review in the House at the moment, we continue to sit tight and patiently wait for some of the more gray areas (for example…  what exactly does “free software” mean…) to be re-visited and possibly re-worded.  Until then, expect the education mission to continue with SST poised to make policy and guidance changes to SST registrants on how the SST Agreement would change in order for the Member States to gain remotely collection authority under the MFA.

I will close this little update with same tone as I closed a prior post: with MFA placed front and center in the larger tax debate that seems to be consuming the nation, this issue is not going away anytime soon.  When you further add that there seems to be a general consensus that remote seller collection is no longer a matter of “if” but “when”, the question still remains one of choice: which flavor will states prefer; Streamlined Sales Tax or alternative MFA simplification?  What almost seemed like a slam dunk for SST to pick up a handful more Members is slowly evolving itself into states pausing and trying to understand how they best adapt to this policy change.  Is that good for taxpayers?  Bad?  Well, the honest answer, as with everything sales tax related is: it depends.

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