1 Streamlined Sales Tax Project Policymakers’ Briefing Rosemont, Illinois September 6, 2000.
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Transcript of 1 Streamlined Sales Tax Project Policymakers’ Briefing Rosemont, Illinois September 6, 2000.
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Streamlined Streamlined Sales Tax ProjectSales Tax Project
Policymakers’ BriefingPolicymakers’ Briefing
Rosemont, IllinoisRosemont, Illinois
September 6, 2000September 6, 2000
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Streamlined Sales Tax ProjectStreamlined Sales Tax Project
BackgroundBackground
• Simplification ProjectSimplification Project
• National Tax Association ProjectNational Tax Association Project
• Advisory Commission on Electronic Advisory Commission on Electronic CommerceCommerce
• National Governors’ Association National Governors’ Association ProposalProposal
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Streamlined Sales Tax ProjectStreamlined Sales Tax Project
Project Focus - ModernizationProject Focus - Modernization Project VisionProject Vision
• Simplification and UniformitySimplification and Uniformity Project MissionProject Mission
• To develop measures to design, test, To develop measures to design, test, and implement a system that radically and implement a system that radically simplifies sales and use taxessimplifies sales and use taxes
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Streamlined Sales Tax ProjectStreamlined Sales Tax Project Project OrganizationProject Organization
• Steering CommitteeSteering Committee–Seven MembersSeven Members
• MI, MO, NC, SD, TN, WI, and WYMI, MO, NC, SD, TN, WI, and WY
• Work GroupsWork Groups
• Project MeetingsProject Meetings–Seven MeetingsSeven Meetings
• Denver (2), St. Louis, Chicago (3), Denver (2), St. Louis, Chicago (3), San AntonioSan Antonio
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Participating States (26)Participating States (26)Arkansas Minnesota Rhode IslandArkansas Minnesota Rhode Island
Florida Mississippi S. CarolinaFlorida Mississippi S. Carolina
Illinois Missouri S. Dakota Illinois Missouri S. Dakota
Iowa Nebraska TennesseeIowa Nebraska Tennessee
Kansas New Jersey UtahKansas New Jersey Utah
Kentucky N. Carolina West VirginiaKentucky N. Carolina West Virginia
Louisiana N. Dakota WisconsinLouisiana N. Dakota Wisconsin
Maryland Ohio WyomingMaryland Ohio Wyoming
Michigan OklahomaMichigan Oklahoma
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Observer States (13)Observer States (13)
Alabama IndianaAlabama Indiana
California MaineCalifornia Maine
Colorado NevadaColorado Nevada
Connecticut PennsylvaniaConnecticut Pennsylvania
Georgia TexasGeorgia Texas
Idaho Vermont Idaho Vermont
WashingtonWashington
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Work GroupsWork Groups Technology, Audit, Privacy and Technology, Audit, Privacy and
Paying for the SystemPaying for the System Tax Base Uniformity and Exemption Tax Base Uniformity and Exemption
AdministrationAdministration Tax Rates, Registration, Returns and Tax Rates, Registration, Returns and
RemittancesRemittances Sourcing and Other SimplificationsSourcing and Other Simplifications
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Technology, Audit, Privacy, and Technology, Audit, Privacy, and Paying for the SystemPaying for the System
Technology solutions Technology solutions Privacy of purchasersPrivacy of purchasers Audit and certification standardsAudit and certification standards Paying for systemPaying for system
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Technology, Audit, Privacy, and Technology, Audit, Privacy, and Paying for the SystemPaying for the System
ModelsModels
• Certified Service Provider (CSP)Certified Service Provider (CSP)
• Retailer Using Certified Automated Retailer Using Certified Automated System (CAS)System (CAS)
• Proprietary System as a Certified Proprietary System as a Certified Automated System (CAS)Automated System (CAS)
• Traditional collection systemsTraditional collection systems
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Certified Service Provider Certified Service Provider
Retailer selects CSP to perform sales tax functions.Retailer selects CSP to perform sales tax functions. CSP determines tax due, pays the tax to the states, CSP determines tax due, pays the tax to the states,
and files the return with the states using a CAS.and files the return with the states using a CAS. States will compensate a CSP.States will compensate a CSP. CSP is liable for tax collected and tax due on CSP is liable for tax collected and tax due on
transactions using certified software.transactions using certified software. CSP is not liable for tax due as a result of errors by CSP is not liable for tax due as a result of errors by
the state and fraud by the retailer.the state and fraud by the retailer. CSP is subject to audit and periodic system CSP is subject to audit and periodic system
checks.checks.
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Retailer Uses Retailer Uses Certified Automated System Certified Automated System
Retailer selects CAS to calculate tax due. Retailer selects CAS to calculate tax due. Person who obtained CAS state certification is Person who obtained CAS state certification is
liable for failure of system to perform as liable for failure of system to perform as certified and failure to timely correct errors.certified and failure to timely correct errors.
Retailer is liable for tax collected and tax due Retailer is liable for tax collected and tax due on transactions using CAS.on transactions using CAS.
Retailer is subject to audit on tax remittance Retailer is subject to audit on tax remittance and return filing. and return filing.
CAS is subject to periodic system checks.CAS is subject to periodic system checks.
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Proprietary System as a Proprietary System as a Certified Automated SystemCertified Automated System
Retailer obtains certification of sales tax system Retailer obtains certification of sales tax system from states.from states.
Retailer is liable for tax collected and tax due on Retailer is liable for tax collected and tax due on transactions using system.transactions using system.
Retailer is subject to periodic system checks.Retailer is subject to periodic system checks. Retailer is subject to audit on tax remittance and Retailer is subject to audit on tax remittance and
return filing.return filing.
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Traditional Collection SystemsTraditional Collection Systems
Current practiceCurrent practice Uniform laws will apply (existing Uniform laws will apply (existing
taxpayers get benefits)taxpayers get benefits)
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Tax Base Uniformity and Tax Base Uniformity and Exemption AdministrationExemption Administration
Exemption ProcessingExemption Processing
• Relax good faith requirementRelax good faith requirement
• Exemption databaseExemption database Product codes/classifications Product codes/classifications
• Exploring coding systemsExploring coding systems DefinitionsDefinitions
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Tax Rates, Registration, Returns Tax Rates, Registration, Returns and Remittancesand Remittances
Rate issuesRate issues Matching rates to jurisdictionMatching rates to jurisdiction Notice of tax rate changesNotice of tax rate changes Single registrationSingle registration Simplified filingSimplified filing
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Sourcing and Other Sourcing and Other SimplificationsSimplifications
Uniform treatment of bad debtsUniform treatment of bad debts Uniform roundingUniform rounding Uniform sourcingUniform sourcing
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The ProjectThe Project AccomplishmentsAccomplishments
• Reviewed Features and IssuesReviewed Features and Issues
• Met with Software ProvidersMet with Software Providers
• Met with RetailersMet with Retailers
• Recruited Resource PeopleRecruited Resource People
• Increased State ParticipationIncreased State Participation
• Issued RFP for Pilot ProgramIssued RFP for Pilot Program
• Awarded Contracts for Pilot ProgramAwarded Contracts for Pilot Program
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Pilot ProjectPilot Project Purpose - Test LinkagePurpose - Test Linkage Features - Existing Tax Law and Some Uniformity Features - Existing Tax Law and Some Uniformity
FeaturesFeatures States: States: Kansas North CarolinaKansas North Carolina
Michigan WisconsinMichigan Wisconsin Projected Date - October 1, 2000Projected Date - October 1, 2000 Certified Service ProvidersCertified Service Providers
• esalestax.comesalestax.com• Pitney Bowes (Vertex)Pitney Bowes (Vertex)• Taxware International (Hewlett-Packard)Taxware International (Hewlett-Packard)• Taxware International (Pitney Bowes)Taxware International (Pitney Bowes)
Streamlined Sales Tax SystemStreamlined Sales Tax System
Uniform Features• Rate Simplifications• Initial Uniform Definitions• Exemption Administration• Uniform Sourcing Rule• Uniform Bad Debts Treatment • Uniform Rounding Rule• Certification Authority• Payment Provisions
Model Legislation
• More Uniform Definitions• Product Coding• Uniform Return• Review of Pilot Results
Jan 2001
Additional Development (Phase II)
Streamlined Sales Tax SystemStreamlined Sales Tax System
Pilot Project• RFP’s Issued• Proposals Received• Proposals Due• Contracts Awarded (Aug 2000)• Pilot Begins (Oct 2000)
Oct 2000Aug 2000
Streamlined Sales Tax SystemStreamlined Sales Tax System
(Uniform Features and Procedures)
Pilot Project
Model Legislation
Legislative Adoption of Model
Legislation (Phase I)Project (Phase II)
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Project TimelineProject Timeline
Sept 13-15 Project MeetingSept 13-15 Project Meeting
Sept 19Sept 19 Draft Work Products Posted to Draft Work Products Posted to
WebsiteWebsite
Sept 29Sept 29 Public Comment DayPublic Comment Day
OctoberOctober Project MeetingProject Meeting
OctoberOctober Drafting of Model LegislationDrafting of Model Legislation
December Approval of Model LegislationDecember Approval of Model Legislation
20012001 Legislative Adoption of Model Legislative Adoption of Model
LegislationLegislation
20012001 Additional DevelopmentAdditional Development
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WebsiteWebsite www.streamlinedsalestax.orgwww.streamlinedsalestax.org
• Structure and RulesStructure and Rules
• Participating StatesParticipating States
• Meeting AnnouncementsMeeting Announcements
• AgendasAgendas
• Press ReleasesPress Releases
• Project UpdatesProject Updates