NOTE: The Marketplace Fairness Act is the focus of attention after having been passed in the Senate in 2013, but not the House. It affords benefits to SST compliant states. The core assumption of proponents is that “Collecting sales tax for sales in multiple states was too difficult before the internet, not anymore.” Our experience leads us to disagree.
Under the Streamlined Sales Tax agreement, a group of states have joined together to provide common definitions and rules for Sales & Use Taxes among the participating states. The most significant potential benefit may be complete relief from all accrued Sales & Use Tax liabilities in one or more member states.
In this respect, all member states are required to provide a one year amnesty period upon becoming a Streamlined Sales Tax member state. The Streamlined Sales and Use Tax Agreement (“SST”) became effective on October 1, 2005, but additional states continue to join as full or associate members. The original amnesty period is past, which reduces the overall amnesty benefit and complicates the decision as to whether SST registration will result in a net benefit. The most significant drawback to SST registration is the requirement to file Sales & Use Tax returns in all the SST member states for a minimum of three years including states in which the registrant would not otherwise have a legal requirement to file.
SST is not right for everyone. Other exposure resolution options may be best for you. Selecting which approach to use to resolve prior period noncompliance is a business decision that should be considered for each applicable individual taxing jurisdiction.
A careful evaluation of your firm’s situation is essential to see if SST registration is the right exposure resolution option for you. Our SST experienced professionals can help with the evaluation and ensure you make an informed decision. Sales Tax Colorado can also assist you with the registration process and some of the technical implementation considerations.
Contact us today for a no-obligation consultation about your Sales & Use Tax issues.
