State delegates approve simplified tax agreement

Representatives of 33 states and the District of Columbia on Nov. 13 approved a multistate agreement to simplify the collection of sales tax. The next step for the Streamlined Sales Tax Implementing States (SSTIS), the group organized to create and approve the agreement, is to have state legislatures make the agreement law in their jurisdictions.

While the agreement would simplify tax collection and remission for retailers with stores in multiple states, the SSTIS also hopes to collect use taxes from online marketers, catalogers, and other remote sellers. The Supreme Court has ruled that companies are not required to remit local sales taxes to jurisdictions in which they have no physical presence.

The federal Internet tax moratorium, which expires next November, bans multiple and “discriminatory” taxation on Web-based transactions. SSTIS participants hope that a simplified tax code will override concerns about discriminatory taxation.

The Direct Marketing Association, not surprisingly, has come out against the agreement. “Although this proposal is strictly voluntary with both states and companies having the option to participate,” read a DMA statement, “if a similar measure were passed by Congress, it would represent an onerous burden on interstate marketers.”

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