September 20, 2000 Washington, DC

Co-Chairs:
Charles D. Collins, Jr., North Carolina Department of Revenue
Diane L. Hardt, Wisconsin Department of Revenue

Contact:
Ellen B. Marshall
Palumbo & Cerrell Consulting
202-466-9000

(September 21, 2000 Washington, DC) States working on formulating a new sales and use tax system have released a first set of proposals addressing several components of the system. The public will get a chance to comment on the proposals at a September 29, 2000 public hearing in Chicago, Illinois.

"These proposals address several critical issues—such as sourcing, tax rates, exemption administration, and how technology will be incorporated into the new sales tax system," commented Diane L. Hardt, Wisconsin Department of Revenue, a co-chair of the Streamlined Sales Tax Project. "We have had a lot of input from the business community in putting these proposals together. Now we need to hear what others in the public and private sector think of these ideas."

The Streamlined Sales Tax Project is an effort created by state governments to design, test, and implement a simplified sales tax collection system that can be used for all types of commerce. 39 states are involved in the Project, which has been meeting for the past seven months. The proposals released for the September 29 hearing represent much of the work of the Project that will culminate with presentation to state legislatures beginning in January 2001 of model legislation to implement the new system. The Project expects to continue to meet throughout 2001 to complete work on additional aspects of the system.

"There are some very difficult issues to resolve throughout this process, but the states believe they have come up with good proposals to address each issue," stated Charles D. Collins, Jr., North Carolina Department of Revenue, another Project co-chair. A hallmark of the new system will be extensive simplification in areas involving definitions of items in the tax base and tax rates—a particularly difficult area of compliance for retailers under the current sales tax system. "We believe we have greatly streamlined and simplified many current compliance burdens in the tax rate area—and relieved vendors of much of the responsibility and liability in this area. The Project continues to work on proposals for simplifying definitions including food and clothing. We hope to have proposals ready on these definitions in a month," Collins continued.

Detailed proposals released by the Project are available on its website at www.streamlinedsalestax.org. The website also contains information regarding the September 29 hearing.

"We expect to receive public comment from major retailers and others at this hearing," Hardt stated. "However, we encourage the entire business community that is affected by sales tax collection to provide us with their thoughts either through public comment or a written statement. The states view this input as vital to their continuing work in generating a final product."

Due to the number of issues and proposals under discussion by the Project, a second public hearing has tentatively been scheduled for October 26. The focus of that hearing will be on receiving additional input on the proposals just released and on additional proposals—primarily uniform definitions—that the Project anticipates releasing in October.

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