Georgia Sales Tax

As of August 1, 2011 Georgia became a full member of the Streamlined Sales Tax Agreement (“SSTA”).  Georgia has been an associate member since January 1, 2011.  As a full member of the SSTA, Georgia (and every other full member state) is poised to take advantage of the newly introduced “Main Street Fairness Act”.  The Main Street Fairness Act is a pair of companion bills introduced by US Senator Dick Durbin (Illinois) and US Congressman John Conyers (Michigan).

Interesting that the bills are titled “Main Street Fairness Act” while being sponsored behind the scenes by big box retailers that, it could be argued, put many Main Street businesses out-of-business to begin with.  With that rant out of the way, the issue that this act  addresses is the loss of revenue resulting from the continued move of the economy to electronic commerce primarily via the Internet.

Historically, there’s been a pesky little requirement called “nexus” that prevents states from forcing pure internet retailers to collect sales or use tax.  Internet retailers have gotten a bad rap in my opinion for not collecting sales tax.  In reality, they’re running their business well within the current statutes.  Without nexus (defined as “a physical presence”) in the state, they have no obligation to collect sales or use tax.  The SSTA, in its simplest form, is meant to provide a common set of rules so that the collection of sales tax is simplified to the point that the US Supreme Court is compelled to overturn or revisit rulings such as Quill vs. North Dakota.

So what’s the likelihood that this bill passes?  Not very.  Similar legislation has been introduced in each of the past several sessions.  With other more pressing issues in the form of a credit downgrade and budgetary issues, our legislative branch will have enough on their plate for now.