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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 onInternet sales continues in Congress, state governments areattempting to simplify the processes in place at their level. Salesand use taxes are the biggest single source of revenue for stateand local governments. With the explosion in growth of e-commerce,state and local governments are worrying that too much tax revenuegoes uncollected.

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

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