Tennessee Gov. Phil Bredesen signed legislation this week that requires the state to comply with the Streamlined Sales and Use Tax Agreement.
Created by the Streamlined Sales Tax Project last year, the SSUTA is designed to make the collection of state and local sales tax more manageable for catalogers, e-commerce companies and other direct marketers.
Currently, only sellers with a physical presence, or “nexus,” in the same state as the buyer are required to collect taxes, according to a 1992 Supreme Court decision ruling that the thousands of tax jurisdictions nationwide are too burdensome for direct marketers to track.
States in the Streamlined Sales Tax Project hope that by following the SSUTA's simplified sales tax requirements, it will eliminate the “burdensome” nature cited by the Supreme Court and require DMers to collect sales taxes.
Tennessee is the 13th state to adopt the SSUTA. The others are Arkansas, Indiana, Kansas, Kentucky, Minnesota, Nebraska, North Dakota, South Dakota, Utah, Washington, West Virginia and Wyoming. Streamlining of Tennessee's sales taxes would not take effect before July 1, 2004.