Streamlined Sales Tax Project

Taxation of online transactions is an issue often addressed and yet it has not been resolved in a homogeneous and statutory manner. Online retailers doing business in a mixture of U.S. jurisdictions have to hire a tax attorney able to provide some guidance as to what jurisdictions will subject them to sales or use taxes and what others will provide a tax free environment for their transactions. A carful tax analysis of this nature is the only mode to avoid liability for unpaid taxes and sanctions. Even though the federal government extended the Tax moratorium exemption for Internet transactions until 2011, state jurisdictions are entitled to tax online transactions with sale or use taxes. Indeed, many jurisdictions have already implemented this tax policy for online sales and are increasing their state revenue. This article briefly explains the scope of the Streamlined Sales Tax Project (“SSTP”). SSTP is a project proposing solutions for a unified policy on sales and use taxes among the U.S. states.

The following questions have been addressed in this article:

What are the potential liability issues of sales and use taxes?
What are the key features of this SSTP?
What are the three models being discussed?
What States are Participating in this project?

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