20 states pass legislation to support online sales tax collection

Twenty states have passed sales tax legislation to support the Streamlined Sales Tax and Use Agreement, a measure devised by the multi-state Streamlined Sales Tax Project to provide for common methods among states to define and collect sales tax. States with such legislation would be authorized to mandate collection of online sales tax under federal legislation submitted last week. The new state laws are designed to collectively support a more orderly and efficient means of collection.

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The 20 states represent more than 20% of the population of states that impose sales tax, says Diane Hardt, co-chair of the Streamlined Sales Tax Project and tax administrator for Wisconsin. She adds that the SSTP has figured 20% as a threshold of support needed to back any proposed federal legislation. Last week, a bill submitted to the House of Representatives by Reps. Ernest Istook (R., OK) and William Delahunt (D., MA) would authorize states that support the Streamlined Sales Tax Agreement to force online retailers to collect sales tax. Sens. Michael Enzi (R.-WY) and Byron Dorgan, (D., ND) say they plan to soon submit a Senate version.

About 30 states overall are expected to eventually enact sales tax legislation to support the streamlined tax measure, Hardt says.

Following are the states that have passed new sales tax legislation and the available effective dates, according to the Streamlined Sales Tax Project:
-- Arkansas
--Hawaii, July 1, 2003
--Indiana, Jan. 1, 2004
-- Iowa, July 1, 2004
-- Kansas, July 1, 2003
-- Kentucky, July 1, 2004
-- Minnesota
-- Montana
-- Nebraska, Jan. 1, 2004
-- Nevada, July 1, 2003
-- North Carolina
-- North Dakota, Dec. 31, 2005
-- Ohio
-- Oklahoma, Nov. 1, 2003
-- Oregon
-- South Dakota, Jan. 1, 2004
-- Tennessee
-- Texas
-- Utah, Jan. 1, 2004
-- Vermont
-- Washington
-- West Virginia, Jan. 1, 2004
-- Wyoming