The Japanese parliament has approved a 3.29 percent cut in the corporate tax rate from an effective rate of about 35 percent, according to Bloomberg. Prime Minister Shinzo Abe has previously announced plans to lower the...
- The Tax Policy Blog
- Streamlined Sales Tax Executive Denies Saying Reliable Pr...
Streamlined Sales Tax Executive Denies Saying Reliable Products Aren't Available
I’m at the annual meeting of the National Conference of State Legislators (NCSL) this week, and online sales tax issues were a big part of the agenda at today’s state tax task force meeting. After the meeting, Scott Peterson of the Streamlined Sales Tax Board waved me over to show me my blog post on last week’s Senate hearing on his phone. In that post, I reported that after it was revealed that a sales tax provider had provided badly flawed information, Peterson (who was one of the witnesses) admitted that reliable sales tax lookup software did not yet exist but that a federal law requiring sales tax collection would create the market for it.
Peterson denies that he said this. I replied that I pulled it from my notes from the hearing, but he then walked away before I could discuss the issue further. I certainly don’t want to put anything inaccurate on our website, and luckily, the hearing was taped, so I rewatched it and below provide a transcript of the relevant portion. I must admit that there’s a sentence that creates a bit of ambiguity but I stand by what I wrote because no other meaning makes contextual sense.
At about 1:05 in the video, Senator Mark Begich (D-AK) asks about whether the bill’s proposed small business exemption threshold of $500,000 is the right amount and whether it should be adjusted over time, and if so, in what direction. Steve DelBianco answers first, arguing for a much higher threshold and stating that most sales tax money will be collected even with a threshold of $15 million. Begich analogizes that to an inventory tax reform in Alaska. At about 1:07, Peterson has his turn:
PETERSON: Thank you, Senator. The half million dollars that’s in the Marketplace Fairness Act was arrived at by looking at where it was cost-effective for states and retailers to file sales tax returns. But it was looking at the world that exists today. Six months after this bill passes, a year after this bill passes, sales tax administration software will be ubiquitous. It’ll be everywhere.
SENATOR BEGICH: Right.
PETERSON: The cost of collecting will go down radically. Now, the people I represent aren’t advocating a different rate. But the reason it doesn’t exist today is that there is no law that requires it to exist. Once that law happens, this will be everywhere and the cost of administration goes down radically.
In short, the way I understand it, Peterson says that sales tax lookup software will be “everywhere” after the bill passes and drive costs down, and after briefly referencing SSTP’s acquiescence in a small business exemption, says that “it” doesn’t exist today but “this” will soon be “everywhere” once the law passes and “requires it to exist” and will drive costs down. I read these two phrases to be talking about the same thing: “it” and “this” to mean the software. That makes sense contextually, as Peterson made the statement after it came to light that one of the sales tax lookup services was grossly in error.
I’m not sure what Peterson contends he meant, as he didn’t explain it to me in our encounter today. Perhaps he meant “it” to refer to the small business exemption level, although that means that the thing in paragraph 1 that he says will be everywhere and drive costs down is completely different from the thing in paragraph 2 that he says will be everywhere and drive costs down. But I’ve given you all the information: you can be the judge.
What’s clear is that Mr. Peterson does not stand by the statement I have attributed to him. I note only that he of course has an institutional reason for denying any assertion (even his own) that sales tax lookup software is not yet reliable, easy, accurate, inexpensive, and available, even after his side’s chosen witness on this point demonstrated that that is not the case.
Subscribe to the Tax Foundation Newsletter
We will never sell or share your information with third parties.
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.