Sales tax agreement approved Representatives of some 33 states have voted to approve
an historic, multi-state agreement to simplify the nation’s sales
tax laws by establishing one uniform system to administer and collect
sales taxes on nearly $3.5 trillion in retail transactions annually. The work of the so-called Streamlined Sales Tax Implementing
States (SSTIS) is another major step in a long process which MRA hopes
will result in federal authorization for states to require out-of-state
retailers to collect sales taxes on all merchandise shipped into a taxing
jurisdiction. All of the participating SSTIS jurisdictions are expected
to introduce the agreement in their respective legislatures when the new
sessions convene in January. The goal will be to win enactment in at least
10 states to trigger implementation of the multi-state sales tax collection
compact, which would take effect July 1, 2003. Congress will then be asked to adopt legislation which,
in essence, would make the tax collection requirement mandatory, at least
in those states that had adopted the model agreement as law. Under existing
Supreme Court decisions, states are precluded from requiring out-of-state
sellers to collect sales taxes. MRA’s Washington Office has joined with other retail
and real estate interests in pushing federal legislation, and 2003 could
be a pivotal year for two reasons. First, the work of the SSTIS project
provides momentum for action. Second, the existing federal moratorium
on new state taxation of the Internet will expire near the end of 2003. Shortly after the SSTIS vote was tabulated, a coalition
of several unnamed multi-state sellers announced that the retailers were
prepared to voluntarily register with individual states to begin collecting
sales taxes on or about February 1 in exchange for amnesty against any
potential state and local sales and use tax liabilities in any state adopting
the SSTIS model. The push to get legislation passed will also be getting
underway in Michigan after the New Year. MRA’s Governmental Affairs
Department will be working with key Granholm administration officials
and legislators to begin the ratification process in Michigan. MRA worked
extremely hard in 2001 to pass legislation allowing Michigan representatives
to participate in the decision-making process related to the Streamline
Sales Tax Project. “With term limits replacing many of those who voted for the 2001 legislation, the effort to educate new legislators on the importance of a level playing field between remote sellers and Main Street retailers is more crucial than ever and will be a top legislative priority,” said MRA’s Larry Meyer, chairman and CEO. “Once this effort gets underway, MRA will work to provide members with ways in which they can contribute to the process through grassroots communication with state legislators.” |