California Joins Streamlined Sales Tax Project

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California joined the list of states participating in the Streamlined Sales Tax Project following Gov. Gray Davis' signing last week of S.B. 157, which takes effect Jan. 1.


California is the 39th state to join the SSTP, a coalition of about 40 states working to create a more uniform sales tax structure for state and local governments.


Currently, only sellers with a physical presence in the same state as the buyer are required to collect taxes, according to a 1992 Supreme Court ruling, because the thousands of tax jurisdictions nationwide are too burdensome for direct marketers to track.


The SSTP last year developed the Streamlined Sales & Use Tax Agreement, which it says would overcome the Supreme Court's objections by greatly reducing the thousands of state and local sales tax rates. For example, the agreement restricts how and when states and municipalities could change their tax rates. In addition, local jurisdictions could not have more than one local sales tax rate.


S.B. 157 doesn't require California to adopt the agreement or change its tax structure, only to join the SSTP.


Last month, Reps. William Delahunt, D-MA, and Ernest Istook, R-OK, introduced H.R. 3184, the Simplified Sales and Use Tax Act of 2003, to give states that adopt the SSUTA the authority to require all out-of-state retailers to collect sales taxes on their behalf.


Sens. Byron Dorgan, D-ND, and Michael Enzi, R-WY, are expected to debut a companion bill soon.


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