Why was the Streamlined Sales Tax created?
The Streamlined Sales and Use Tax was created by the National Governor’s Association (NGA) and the National Conference of State Legislatures (NCSL) in the fall of 1999 to simplify sales tax collection. According to the 2007 U.S. Census, general sales and gross receipts comprise nearly 32 percent of total state tax collections. The sales tax is second only to personal income taxes as the largest source of state revenue. Leaders from the NGA and NCSL are members of the Advisory Commission on Electronic Commerce that was created when the Internet Tax Freedom Act was passed. As a result of the work of this Commission, the leaders of those two organizations were concerned that a 1930’s sales tax would not be relevant in 21st century commerce. This finding resulted in the nation’s governors directing their tax administrators to develop a simpler, business-friendly sales tax system.
