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As Julie Minor of CCH recently reported, Ohio and Utah may soon become full members of the Streamlined Sales and Use Tax Agreement. The Streamlined Sales Tax Governing Board voted during its May meeting to amend the Agreement to allow states with origin-based sourcing rules for intrastate sales to become full members of the Agreement. Currently, Ohio and Utah are associate members because of their origin sourcing provisions. Prior to the amendment, the Agreement required full member states to apply destination sourcing rules to intrastate as well as interstate sales. Full membership for Ohio and Utah is not automatic, however. The states must submit applications and be found in substantial compliance with the Agreement before they can become full members. The board plans to meet on June 29 to vote on full membership, which is expected to take effect on October 1, 2012.


In addition to allowing states with origin sourcing of intrastate sales to become full members, the board also voted in a new provision in the Agreement to create a Local Government Advisory Council to advise it on matters related to the administration of the Agreement if the issue specifically relates to local governments.


Federal Remote Seller Legislation


The SST governing board was also updated on progress made in efforts to lobby  Congress to pass federal remote seller legislation. There are currently two bills, the Marketplace Fairness Act in the Senate and the Marketplace Equity Act in the House. Joan Wagnon, FedTax, said it appears that enough votes exist in the House to get the legislation enacted. Proponents are currently looking for the right "vehicle" bill for the legislation.


Deal of the Day Vouchers


While presented with two different proposed rules regarding "Deal of the Day" vouchers, the governing board declined to adopt either rule. Over the past several months, an SST State and Local Advisory Council workgroup surveyed the states, held conference calls, and crafted the two proposals—one put forward by Sherry Hathaway of the Tennessee Department of Revenue and one by Ellen Thompson of the Nebraska Department of Revenue. The matter was referred back to the SLAC for further consideration.


Under the Tennessee proposal, for vouchers sold for less than their stated face value, tax would apply upon redemption to the price paid by the consumer for the voucher, and the difference between the price paid by the consumer and the face value of the voucher would be treated as a cash discount, which is excluded from the Agreement's definition of "sales price."


The Nebraska proposal would generally allow states to keep their current policies in choosing between three options: (1) apply tax to the face value of the voucher; (2) apply tax to the price paid by the consumer; or (3) distinguish between vouchers with a stated face value (taxed on the face value) and vouchers with no stated face value redeemable for a specific product or service (taxed on the price paid by the consumer). Nebraska's proposal would require states to disclose which option they follow in the SST taxability matrix.


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