The Streamlined Sales Tax Project was founded in March 2000, with the purpose of developing measures to simplify and unify state and local sales taxes. Although an undertaking to modernize sales taxes would be intrinsically beneficial for both the governments that impose the taxes and the businesses required to collect them, sales tax streamlining is primarily an effort by states to enhance sales tax collection on mail order, catalog, Internet and other remote sales. The expectation of the states is that out-of-state businesses without a requirement to collect sales tax will voluntarily collect tax when the states adequately streamline their sales taxes.

Background

The simplification measures crafted by the Streamlined Sales Tax Project are contained in a multi-state compact called the           “Streamlined Sales and Use Tax Agreement.” The provisions in the Agreement address nearly every aspect of sales taxation. Some of the requirements relate to how a member state may structure its tax. These include: single state and local base; uniform definitions within tax bases; tax rate simplifications; uniform sourcing rules; simplified exemption administration; elimination of “caps” and “thresholds;” and, simplified sales tax holidays.