US Taxation: Streamlined Sales Tax (SST)

Janhavi Wagh -

Have you ever wondered what Streamlined Sales Tax (SST) is? Will you be able to answer any questions related to SST if you’re being asked? Probably not, but you will soon, right after you finish this article. In this article, we will cover the brief history of SST, why it is being implemented, and the members in it.

Without going into in-depth details, it all started when the Supreme Court in the United States of America received cases where they were asked to consider allowing the collection of remote sales tax. However, their request was rejected because the court explained to them that to collect sales tax from remote sellers was way too complicated to enforce.

In return, two groups embarked on a mission to try and create a more straightforward tax system for businesses to navigate in 1999. An agreement known as the Streamlined Sales and Use Tax Agreement is then created in 1999 as a result of the cooperative effort between the state and local governments with the business community. In the following year, the Streamlined Sales Tax Project (SSTP) was initiated.

The Mission of the Streamlined Sales Tax

Based on the Streamlined Sales Tax Governing Board, the mission of SSTP is to streamline, simplify, and modernize the sales and use tax collection and administration that is believed to reduce businesses' costs and burdens.

Twenty-four states are full member states today:

  • Arkansas
  • Georgia
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Michigan
  • Minnesota
  • Nebraska
  • Nevada
  • New Jersey
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Washington
  • Vermont
  • West Virginia
  • Wisconsin
  • Wyoming
  • Rhode Island
  • South Dakota
  • Utah

Tennessee is an associate member state. All the members are required to have:

  • Central, the electronic registration system for all member states.
  • Uniform state and local tax bases
  • Uniform tax base definitions and regulations
  • Uniform sourcing rules for all taxable transactions
  • State-level administration of sales and use tax collections.
  • Simplified tax returns.
  • Simplified tax remittances
  • Simplified state and local tax rates.
  • Simplified administration of exemptions
  • Protection of consumer privacy.

The registered members will receive standard benefits listed above, in any or all 24 member states.

For businesses to qualify as a volunteer seller in a member state and obtain Certified Service Provider (CSP) services at zero cost, they will have to meet the requirements stated during the 12 months before the date of registration with the member state.