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DECEMBER 22, 2000 PUBLIC HEARING
FOR IMMEDIATE RELEASE
December 26, 2000
Washington, DC
States Vote to Approve Recommendations on New Sales Tax System
State representatives to the Streamlined Sales Tax Project involved in formulating the specifics of a new sales and use tax collection and administration system have voted to approve a Uniform Act and Uniform Agreement to implement a more modern system. The Act and Agreement will now be forwarded to the National Governors’ Association and National Conference of State Legislatures for consideration and to the states to begin the drafting and legislative process. State legislatures could begin debating the issue in January 2001.
"We are extremely pleased that the states have approved this Uniform Act and Agreement which puts both states and businesses on the road to true sales tax simplification and uniformity," commented Diane L. Hardt, Wisconsin Department of Revenue, a co-chair of the Project. 38 states are currently involved in the Project, which began its work in March 2000. The focus of the Project is to develop a simplified sales and use tax collection and administration system that can be used by all vendors for all types of commerce.
The work of the Project evolved largely in response to pleas from the business community to the states to overhaul their existing sales and use tax laws. Currently, vendors operating in the 45 states with sales taxes must comply with multiple tax rates, varying laws on product definitions, extensive tax return requirements, and costly and time-consuming annual audits.
Hallmarks of the new system are its use of technology, its focus on uniform definitions, uniform tax rates, a one-stop vendor registration system, and minimal vendor audits. "This system brings sales tax administration into the 21st century and addresses many of the concerns that businesses have expressed to us over the past several years," stated Charles D. Collins, Jr., North Carolina Department of Revenue, a co-chair of the Project. "Multistate businesses face a number of challenges in complying with the existing sales and use tax laws. Our primary focus has been on easing, or eliminating, the tax collection burden for vendors—while promoting a level playing field in the marketplace."
The Uniform Act and Uniform Agreement adopted by the Streamlined Sales Tax Project will now be submitted to state legislatures for their consideration and enactment. The Act provides the authority for a state to enter into agreement with other states to implement the new system. The Agreement sets forth the specific elements of the new sales and use tax system—all of which must be enacted by a state for it to be in compliance and become a participant in the new system.
The Project believes several state legislatures will consider the legislation in 2001. In addition, the Project will continue its work throughout the next year to enable it to incorporate other elements into the new system including additional uniform definitions and modifications to technology models.
Additional information on the Streamlined Sales Tax Project, including a copy of the Uniform Act and Uniform Agreement, can be found on the Project’s website at www.streamlinedsalestax.org.