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A Tax to Grind

Will there be a sales tax standard to simplify the process?

This story appears in the June 2001 issue of Entrepreneur. Subscribe »

While the debate over whether sales taxes should be imposed on Internet sales continues in Congress, state governments are attempting to simplify the processes in place at their level. Sales and use taxes are the biggest single source of revenue for state and local governments. With the explosion in growth of e-commerce, state and local governments are worrying that too much tax revenue goes uncollected.

So 32 states recently created the Streamlined Sales Tax Project (SSTP), which plans to design, test and implement a simplified system of collecting sales tax that can be easily applied to all types of commerce, including e-tailing. Sounds ambitious, and it is. Though no time frame has been established, insiders say it may take several years to accomplish meaningful tax simplification. Still, you should watch this initiative closely because it will have an impact on your business.

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