The US Streamlined Sales Tax Governing Board (SST) has found potential non-compliance with the Streamlined Sales and Use Tax Agreement (SSUTA) in Georgia, Nebraska, and Ohio during its 2024 Annual State Compliance Review.
The SST has requested feedback on the report or the compliance of any Streamlined state with the SSUTA requirements by 3 September 2024.
The purpose of the SSUTA is to simplify and modernise sales and use tax administration to reduce the burden of tax compliance substantially. The Agreement focuses on improving sales and use of tax administration systems for all sellers and all types of commerce.
Twenty-four states have adopted the simplification measures in the Agreement (representing over 31% of the population), and more states are moving to adopt the simplification measures.
Georgia
The report highlights four issues for Georgia concerning tax administration, caps and thresholds, and tax base. It notes that Georgia has been non-compliant with these requirements since 2013.
Ohio
The annual review found Ohio non-compliant with SSUTA Section 322 on sales tax holidays. Ohio expanded its existing sales tax holiday to cover all tangible personal property under USD 500, with some exceptions. On 31 May 2024, the state informed Ohio vendors about the sales tax holiday, scheduled from 30 July 2024 to 8 August 2024.
However, this notification did not meet the SSUTA requirement that it be issued 60 days before the start of the month in which the sales tax holiday begins.
Under the current version of the Agreement, if a state chooses to have a sales tax holiday that begins on 1 July 1, it must provide notice of that sales tax holiday by May 1 (60 days prior to the first day of the calendar quarter in which the sales tax holiday begins).
In addition, if a state chooses to have a sales tax holiday starting on 1 August 1 (90 days after the notice is required) or 1 September 1 (120 days after the notice is required), the state must still provide notice of this holiday by 1 May 1 since that is 60 days before the first day of the calendar quarter in which the sales tax holiday is going to take place.
Nebraska
Nebraska was non-compliant with SSUTA Section 308, which bans multiple states and use tax rates on personal property or services.
In 2023, Nebraska adopted the Good Life and Transformational Projects Act (LB 727). The Act aims to promote and develop the general and economic welfare of this state and its communities by providing support for unique Nebraska projects that will attract new industries and employment opportunities and further grow and strengthen Nebraska’s retail, entertainment, and tourism industries.
Under this Act, eligible persons may apply for a Good Life District designation that must:
- Generate new economic activity, as well as additional state and local taxes from persons residing within and outside the state;
- Create new economic opportunities and jobs for residents; and
- Promote new-to-market retail, entertainment, and dining attractions.
Good Life Districts will receive a reduction in state sales tax from 5.5% to 2.75% for sales made within the district.
The annual review highlighted that a workgroup is reviewing an amendment to SSUTA’s section 308 to permit states to impose an additional state tax rate under specific conditions.
The Compliance Review and Interpretations Committee (CRIC) will start reviewing each state’s compliance with SSUTA on 17 September 2024, considering findings from the annual review and public comments. The other twenty SST member states have no compliance issues with SSUTA.
