Streamlined sales tax project.The Streamlined Sales Tax Project Organized in March 2000, the Streamlined Sales Tax Project (SSTP) objective is to simplify and modernize sales and use tax collection and administration in the United States. (Project) was created by state governments (with input from local governments and the private sector) to simplify and modernize mod·ern·ize v. mo·dern·ized, mo·dern·iz·ing, mo·dern·iz·es v.tr. To make modern in appearance, style, or character; update. v.intr. To accept or adopt modern ways, ideas, or style. sales and use tax Sales and use tax refers to:
The Project's proposals will incorporate uniform definitions within tax bases, simplified audit and administrative procedures and emerging technologies to substantially reduce tax collection burdens. The Streamlined Sales Tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. System (System) focuses on improving sales and use tax administration systems for both mainstream and remote sellers for all types of commerce. Currently, 38 states are involved in the Project; thirty-two states are voting participants because their legislatures have enacted enabling legislation Noun 1. enabling legislation - legislation that gives appropriate officials the authority to implement or enforce the law legislation, statute law - law enacted by a legislative body or their governors have issued executive orders or a similar authorization The right or permission to use a system resource; the process of granting access. See access control. . Six states are nonvoting participants, because they do not have the formal commitment of the state executive or legislative branch. The Project has addressed its issues through a steering committee steer·ing committee n. A committee that sets agendas and schedules of business, as for a legislative body or other assemblage. steering committee Noun and the following four work groups: * Tax base and exemption administration. * Tax rates, registration and returns. * Remittances
Remittances are transfers of money by foreign workers to their home countries. , technology, audit, privacy and paying for the System. * Sourcing and other simplifications. Businesses--including national retailers, trade associations, manufacturers, technology companies and others--have actively participated in Project meetings by reviewing proposals and providing feedback to the states on key elements. The System's key features include: * Uniform definitions within tax bases. Legislatures still choose what is taxable and exempt, but will use the common definitions for key items in the tax base. * Simplified exemption administration for use- and entity-based exemptions. Sellers are relieved of the "good faith" requirements under current law and will not be liable for uncollected tax. Purchasers will be responsible for incorrect exemptions claimed. * Rate simplification. States will be responsible for the administration of all state and local taxes and the distribution of local taxes to local governments. State and local governments will use common tax bases and accept responsibility for notice of rate and boundary changes. States will be encouraged to simplify their own state and local tax rates. * Uniform sourcing rules. The states will have uniform sourcing rules for all property and services. * Uniform audit procedures. Sellers who participate in one of the certified See certification. System technology models either will not be audited or have a limited-scope audit, depending on the technology model used. * Paying for the System. To reduce the financial burdens on sellers, states will assume the responsibility for implementing the System. Participation in the System by both vendors and states is voluntary. Also, registration by vendors in the System does not infer nexus for business activity or income tax purposes. The System will allow sellers to use one of three technology models. A seller may select Model 1, under which a Certified Service Provider performs all of the seller's sales tax functions. A seller may select Model 2, a Certified Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. System, to perform only the tax calculation function. A large seller with nationwide sales that has developed its own proprietary sales tax software may select Model 3 and have its own system certified by the states. However, some sellers may choose to continue to use their current systems and still enjoy the benefits of simplification. In late 2000, state representatives to the Project voted to approve a Uniform Sales and Use Tax Administration Act and Streamlined Sales and Use Tax Agreement, which state legislatures A state legislature may refer to a legislative branch or body of a political subdivision in a federal system. The following legislatures exist in the following political subdivisions: The approval of the Act and Agreement provides the basis for states to enact legislation to provide the benefits of simplification to vendors in their state. However, the Project will continue its work throughout 2001 to incorporate additional elements into the System. These elements may include additional uniform definitions, a uniform tax return and revisions to the technology models based on information gained through the testing of tax collection software. For more information, see www.geocities.com/streamlined2000. |
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