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 Addresses
Simplification
THE
ISSUE
Compliance
under the current sales and use tax systems is extremely difficult.
Currently, 45 States and the District of Columbia impose sales
and use taxes on the purchases of goods. Within many states,
local governments also impose sales and use taxes, resulting
in approximately 7,500 disparate tax jurisdictions in the
United States. States must dramatically simplify their existing
sales and use tax systems before collection obligations are
expanded. This includes simplicity and uniformity in tax rates,
administration, definitions and classifications. Extending
the current moratorium without addressing the issue of sales
and use tax simplification financially threatens our businesses
and communities.
- The
complexity of state sales and use tax systems imposes significant
compliance burdens and costs on retailers. States that expect
others to collect their taxes for them must provide and
maintain mechanisms to compensate for those efforts. Under
any scenario, retailers must be compensated for acting as
a state's collection agent. Studies show that retailers
bear a significant cost in collecting state sales and use
taxes.
- States
have formed their own initiative, the "Streamlined Sales
Tax System Project," a cooperative effort with local
governments, to radically simplify the sales and use tax
system.
FACTS
ABOUT SIMPLIFICATION
Retailers
believe states that adequately simplify their sales and use
tax systems should be authorized to prevent inequities in
taxation by requiring sellers to collect taxes on the sale
of goods or services delivered in states, regardless of the
channel of distribution used.
- The
current system places an unfair burden on the traditional
brick-and-mortar retailer who is forced to collect taxes
on behalf of the states. However, once simplified, all retailers
should have the same collection obligations, regardless
of the delivery channel.
- Over
30 states have already passed legislation or gained a Governor's
executive order to simplify their sales and use tax system.
Congress must now provide them the authority to expand their
collection authority if states agree to simplify their sales
tax systems.
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