Tax time: Streamlined Sales and Use Tax Agreement

[mandy]

It may be too late to reap buckets of tax revenue from this year`s holiday shopping season, but the long battle to launch a multi-state program of collecting sales tax on all Internet sales is finally coming to fruition this month. At least 18 states have agreed to begin participating under terms of the Streamlined Sales and Use Tax Agreement, or SST, a plan drawn up with features like free tax -collection software and back-tax amnesty intended to win broad participation from merchants.

n the planning stages for years, the simplified sales tax plan finally kicked off Oct. 1 as a voluntary program for merchants, though state tax officials as well as large multi-channel retailers who already collect sales tax on Internet and catalog transactions are hoping the built-in incentives will lead to broad participation and, eventually, a mandatory national program as early as next year.

Tough issues

Some tough issues remain with significant implications for the competition between small and large retailers, for catalogers, and even for e-commerce pioneer Dell Inc...

full article: http://www.internetretailer.com/article.asp?id=16562

related topics: http://community.tuliptools.com/index.ph...618.0.html
                      http://community.tuliptools.com/index.ph...291.0.html

[mandy]

The Streamlined Sales Tax Governing Board, which oversees a 19-state program of collecting cross-border sales tax on Internet purchases, has certified three providers of sales tax collection software available to retailers.

The three software providers are Avalara, Bainbridge Island, WA; Taxware, Wakefield, MA; and Wynnewood, PA-based Exactor Inc...

These sales tax compliance, collection and remittance services are being offered for free to merchants who volunteer to collect and remit cross-border sales tax but are not required to by current law. Other incentives for such merchants may include exemption from audits and protection from liability for mistakes in tax calculation...

full article: http://www.internetretailer.com/dailyNews.asp?id=18491

[mandy]

An update: California will not be participating in the Streamlined Sales Tax Initiative

At a time when California is trying to find money to balance the budget, fund a statewide health-care plan and build roads and schools, lawmakers have backed away from one potential source of money: the Internet...

According to the Board of Equalization, California forfeits about $2 billion a year in taxes by not collecting on out-of-state sales made over the Internet.

The state does require Internet retailers who have physical stores in California to collect sales tax on sales made to Californians. The state also requires its residents to report purchases made over the Internet and pay taxes on them. Apparently few people do. (There's a line on the income tax form, in case you've missed it.)...

full article: http://sanjose.bizjournals.com/sanjose/s...ml?f=et169&b=1171256400%5E1415069&hbx=e_vert

[mandy]

Update: Washington State will be participating

Governor Chris Gregoire signed a measure Thursday that will have Washington join a national push to have Internet and catalog companies collect and distribute sales taxes...

"This bill helps level the playing field between in-state and out-of-state retailers, helps Washington businesses compete with online businesses and it allows us to recover sales taxes from out-of-state retailers," said Governor Gregoire...

The state Department of Revenue predicts that Washington will initially see an additional $40 million in sales tax by joining...

full article: http://www.king5.com/business/stories/NW...fd291.html

[Boucher]

The state Department of Revenue predicts that Washington will initially see an additional $40 million in sales tax by joining.

I wonder if that number takes into account the consumers who will avoid doing business with Washington State companies, over the internet, preferring the discount available from companies based in other states that won't be charging tax?

Seems like a good idea on the surface but they should have tried harder to get a unanimous consensus. 

[bargainbloodhound]

Seems like a good idea on the surface but they should have tried harder to get a unanimous consensus. 

New York and California won't be participating. 

It's going to be a nightmare for smaller merchants who will have to keep track of 100s of different local sales tax rates.  Most shopping carts don't have the ability to do it yet.

I doubt if Amazon (based in WA) is very happy the bill passed.  Both Amazon and eBay have been lobbying against the Streamlined Sales Tax.