Streamlined Sales Tax Project Governing Board Adopts Origin Sourcing Option

The new Origin Sourcing Option may offer some relief to small businesses in states that have not yet filly implemented SSUTA. It is still unknown if states that have already adopted SSUTA can roll-back their laws from destination based taxes to origin source taxes. Rolling back would provide relief to small businesses in Arkansas, California, Florida, Oklahoma, and New York.

"The Streamlined Sales Tax Project ("SSTP") Governing Board voted unanimously on December 12, 2007, to amend the Streamlined Sales and Use Tax Agreement (the "Agreement") to allow member states to elect an origin sourcing rule to source intrastate sales (i.e., sales occurring entirely within a state). The Agreement previously required its member states and their local tax jurisdictions to source transactions on a destination basis for both inter- and intrastate sales.

Pressure from both non-SSTP states (e.g., Texas, Virginia, Missouri, and Illinois) and SSTP states (e.g., Ohio, Tennessee and Utah), coupled with pressure by representatives of local tax jurisdictions, resulted in a unanimous Governing Board vote for a dramatic change to the Agreement’s long-standing destination sourcing rule. The amendment permits states to elect to retain (or adopt) origin sourcing for sourcing of intrastate sales under a uniform methodology."

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