Streamline Sales Tax Legislation – Not So Fast

Washington, DC – Today, the Subcommittee on Commercial and Administrative Law will hold a hearing titled “The Streamlined Sales Tax Agreement: States’ Efforts to Facilitate Sales Tax Collection from Remote Vendors.”  NetChoice Executive Director Steve Delbianco made the following statement in response to the congressional push for remote sales tax legislation:

“Congress is putting the cart before the horse by introducing remote sales tax legislation before the states have delivered any of their promised “simplification”.  Not only will this legislation will provide little budget relief for states, but the Simplified Sales and Use Tax Agreement is filled with uncertainties that could endanger the future of small businesses online.

The multi-state Simplified Sales Tax Project (SSTP) continues to be stymied by the Gordian Knot of sales tax simplification.  The SSTP is attempting to reduce the number of taxing jurisdictions from the current high of 7600 down to merely one per state.  However, a web of competing interests within state and local governments has made this anything but simple.

Despite their declared intentions to simplify, states are still disagreeing on definitions, sourcing rules and compensation for the burden on sellers. Kansas has deferred the destination-based sourcing aspect of the SSTP agreement altogether and Texas has created a special tax zone to protect computer manufacturer Dell.

Without real simplification and enhanced protections for small businesses in electronic marketplaces, this bill could have dangerous repercussions with little benefits.”

The NetChoice Coalition recently published a paper on the SSTP and the debate surrounding it titled “Sales Tax Simplification: Not So Fast — It’s Not That Simple” that can be found at www.netchoice.org .