There are over 8,000 jurisdictions in the United States with a sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. , many with different bases and different rates. What’s taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. ed in one place isn’t taxed in another, or taxed at a different rate. The sales tax boundary lines don’t line up with 9-digit zip codes, let alone 5-digit zip codes. And it’s always changing. It’s a mess that harms economic growth and only exists because of state parochialism.
One would expect that the Streamlined Sales Tax Project (SSTP), with its avowed mission to make state sales taxes simple and uniform, would do something about it. Unfortunately, they have punted again (subscription required):
The Streamlined Sales Tax Governing Board’s Executive Committee on December 16 voted against a proposed amendment to the Streamlined Sales and Use Tax Agreement that would prohibit a member state from having multiple sales and use tax rates.[…]
During the meeting, [West Virginia Del. John] Doyle questioned the need to introduce the amendment since the one-rate-per-state option had been already been debated in 2007.
Doyle said that even though the committee voted no, it could still go to the full SSTP board, but someone else told the reporter that that wasn’t going to happen.
The SSTP is trying to convince Congress that they have done so much to achieve simplicity and uniformity that states should be permitted to interfere with interstate commerce and impose tax collection obligations on out-of-state businesses. Until the SSTP actually takes on state tax officials and does something serious about simplicity, no one will take that argument seriously.
- Nearly 8,000 Sales Taxes and 2 Fur Taxes: Reasons Why the Streamlined Sales Tax Project Shouldn’t Be Quick to Declare Victory
- Testimony before Maryland Legislature on the Streamlined Sales Tax Project