In its October 11, 2017 meeting in Oklahoma City, the Streamlined Sales Tax Governing Board met at its regular meeting to conduct the business of the SSTP. Among the various agenda topics, the Governing Board addressed whether Georgia and Indiana were in substantial compliance with the Streamlined Sales Tax Agreement - the multistate agreement to streamline the collection and remittance of sales tax across the United States. The Agreement vests authority with the Governing Board to make sure that all the states are playing by the rules and authorizes the Governing Board to take administrative action against participating states that are not in substantial compliance with the requirements of the Agreement.
During this most recent meeting, the Governing Board voted to continue sanctions on Georgia for noncompliance with the Agreement. This was not a new issue for Georgia as they have previously been in noncompliance on a few sections of the Agreement, but the Governing Board voted to remove Georgia's vote until the issues were remedied. One of the issues revolved around the Georgia Legislature's vote to include a good faith acceptance requirement for sales tax exemption certificates.
Tennessee is not a full member in Streamlined, but this action by the Governing Board highlights one of the concerns that was expressed back around 2005 when Tennessee first entered the world of Streamlined and adopted many of the Streamlined definitions. Tennessee was not all-in at the time based, in part, on concerns around sourcing of sales and control of Tennessee's tax laws going forward. Opponents of streamlined trumpeted that Tennessee should not give up control over what sales tax statutes that it would enact.
Despite what were fundamental differences with some of the basic tenants of Streamlined, Tennessee became an associate member of Streamlined and has continued to keep one toe in the Streamlined Sales Tax world with its almost annual delay of the effective date of the controversial Streamlined provisions. Tennessee delayed the effective date during the 2017 legislative sessionuntil 2019, and everyone expects that 2019 will usher in a further extension absent some Federal legislation.
The actions of the Governing Board during its most recent meeting are noteworthy in Tennessee only because those actions are creating a track record that will only embolden and give ammunition to Streamlined opponents in Tennessee. The Legislature is not one to give up control, and the idea that a multistate governing board can tell Tennessee what sales tax laws it has to enact will likely not sit well with a Legislative leadership team that is known to be extremely conservative. Indeed, much will have to change before Tennessee ever alters its stance on Streamlined, and the most recent action of the Governing Board only provide proof of what concerns Tennessee had back when the original Streamlined votes were cast.