Senate Bill offers up a proposed permanent sales and use tax rate and provisions to conform to the SST Agreement.

Both the House and Senate version of the Bill would establish a permanent sales and use tax rate of 5.5%, effective July 1, 2005.

The Senate version includes enacting provisions to conform to the Streamlined Sales and Use Tax Agreement (“SST”).

Highlights of the SST Agreement amendments include:

1. Relieving a vendor from sales and use tax liability if the vendor obtains a completed exemption certificate from a purchaser;
2. Extending the time period in which a consumer that provides a completed exemption certificate may be assessed tax resulting from the denial of a claimed exemption;
3. Conforming to the Agreement’s definitions, the terms durable medical equipment, mobility enhancing equipment, and price would change. Also, exemptions for drugs and medical equipment would conform to the Agreement.
4. Bundling of transactions and how the price and taxability of a bundled transaction would be adopted to conform to the Agreement.

The Senate version of the Bill would keep the 0.9% timely filing and payment discount available to vendors, rather than reducing the discount to 0.75% which is scheduled to occur on July 1, 2005. It also contains amnesty provisions that would establish an amnesty program from November 1, 2005 to December 15, 2005 for state taxes, property taxes, county and transit sales taxes, and school district income taxes.

If passed, the above amendments would take effect January 1, 2006.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com