Streamlined Sales Tax (SST) is the largest sales tax organization in the nation, yet many businesses have never heard of it. Watch this video to find out why SST could be a vital component of your tax management process today and in the future.
Tired of manually managing sales tax? Learn more about sales tax automation with AvaTax.
Hi. Welcome to Wills’ Whiteboard, I’m Will. Streamlined Sales Tax might be the most important sales tax organization that you’ve never heard of. In this video, we’re going to talk about what streamlined sales tax, or SST, is, why it might be important for your business today, and why it might become extremely important for you in the future.
SST was formed as a direct response to a Supreme Court decision in 1992. And the court basically said ‘look. A state cannot make a business collect sales tax if the business has no physical presence in the state. Why? The courts reason was that state sales tax requirements are just too complex and too burdensome to place on interstate commerce. Streamlined Sales Tax was formed in response to this and their mission was and is to simplify and modernize the sales tax requirements. What does that mean for your business today? Well, currently, there are 24 states that have passed SST requirements. Let’s look at which ones those are.
As you can see about half the states in the country have passed SST measures. In fact, over half the states that have the states sales tax have passed SST measures. Why is this important for your business today? Well, if you are doing business in some of the states, joining SST could actually have some advantages for you. Advantages like limited amnesty. If you’ve been doing business in SST states, haven’t been collecting tax, but you think you should’ve been collecting, SST will work with you to waive some of the penalties and interest you would otherwise have had to pay.
There are other advantages, like getting a single registration ID. So when it’s time to update your company information, with taxing in jurisdictions, you don’t have to go state to state to do that. You can do it in a single place for all SST states. Other advantages, like certified sales tax software solutions of which Avalara’s AvaTax was the first. AvaTax basically automates your sales tax management from end to end. Everything from automatic calculations, keeping up with changes, managing exemption certificates, and sending the paperwork off to the state when it’s time to file.
If you join SST, a solution like AvaTax will be subsidized for transactions in SST states. So that’s why SST might be important for you today but it could become even more important for you in the future. As the country continues to debate, on a federal level, online sales tax and other major sales tax changes, SST is playing an important role. For example, there’s a bill right now, in 2013, before congress, that would give states the authority to require businesses to collect sales tax, even if those businesses didn’t have a physical presence in those states. The bill specifically says that states that follow SST requirements will be first in line to be able to implement that authority. What that means is if you’re doing business in SST states and not collecting today, and the law passes, your sales tax requirements may change dramatically and you may have to collect in a lot more states.
Register with SST, and the transition can be a lot smoother because you’ll already be set up, you’ll already be collecting. And if you’re using a certified sales tax software solution, you don’t have to worry about it. It’s being handled automatically for you. I hope this helps explain SST. See you next time.