What is the Streamlined Sales Tax (SST) Agreement?
The Streamlined Sales Tax initiative was developed to reduce the complexity of collecting and remitting sales tax across multiple states.
The effort formally began in 1999 when the National Governors Association and the National Conference of State Legislatures launched the Streamlined Sales Tax Project in response to the rapid growth of ecommerce and mounting concerns over inconsistent state tax systems.
The resulting Streamlined Sales and Use Tax Agreement (SSUTA) established uniform standards for participating states. The agreement was designed to simplify sales tax definitions, sourcing rules, tax administration, registration, and filing procedures so businesses would face fewer compliance burdens when conducting sales across multiple states.
The agreement gained even greater significance following the Supreme Court’s 2018 decision in the South Dakota v. Wayfair, Inc. case, which allowed states to impose tax collection obligations on remote sellers without requiring physical presence. Since then, states have increasingly enforced Economic Nexus laws tied to sales thresholds and transaction volume.
Today, the agreement continues to evolve through administrative updates and state participation changes designed to improve uniformity and support modern ecommerce compliance.
There are currently 23 full member states participating in the streamlined sales and use tax system:
Tennessee currently participates as an associate member state.
The initiative originally involved 44 states exploring ways to modernize and standardize sales tax administration.
The agreement requires member states to adopt several uniform administrative standards intended to reduce compliance complexity for remote sellers and multistate businesses. Key provisions include:
One major feature is standardized handling of Exemption Certificates, which reduces administrative friction for businesses selling exempt products or services in multiple jurisdictions.
The agreement also emphasizes Destination-Based Sales Tax sourcing rules, meaning tax is generally based on the customer’s location rather than the seller’s location.
Managing sales tax obligations across numerous states can become highly burdensome because every state applies different thresholds, rules, filing frequencies, and taxability standards.
The SST framework simplifies compliance by creating more uniform administrative procedures among participating states. Businesses can register through one centralized system rather than registering separately with every state tax authority.
The agreement also supports automated compliance through Certified Service Providers (CSPs). Businesses qualifying as volunteer sellers may receive tax calculation, filing, remittance, and reporting services at little or no cost through approved providers.
This became especially important after states widely adopted remote seller requirements tied to economic activity thresholds. For example:
The agreement also helps standardize handling of Use Tax obligations and reporting requirements that historically created confusion for remote sellers.
Businesses can register through the Streamlined Sales Tax Registration System (SSTRS), which provides centralized registration for participating states.
Once registered, sellers must determine whether they qualify as volunteer sellers. Generally, qualification depends on factors such as:
Businesses that qualify may receive Certified Service Provider support at no cost in participating states, although CSPs may charge separately for services outside the scope of the CSP agreement. These providers can assist with:
Automation has become increasingly valuable as states continue expanding enforcement tied to remote sales activity.
No. Participation generally simplifies compliance and administrative responsibilities rather than lowering actual taxes owed. Businesses must still collect and remit applicable taxes based on state laws, nexus thresholds, product taxability rules, and transaction sourcing requirements.
A CSP is a certified third-party provider authorized to manage sales tax calculations, filing, remittance, and reporting for participating SST states. Eligible volunteer sellers may receive these services without standard registration, filing, or calculation fees in member states.
No. Participation is voluntary. However, businesses operating in multiple SST member states may benefit from simplified registration, centralized filing systems, automation support, and more efficient compliance management through participating Certified Service Providers.
The agreement standardizes administration procedures surrounding exemption documentation and acceptance. This reduces inconsistencies between member states and helps businesses manage exemption records more efficiently while improving audit readiness and compliance consistency.
For more than four decades, Bennett Thrasher has provided businesses and individuals with strategic business guidance and solutions through professional tax, audit, advisory, and business process outsourcing services. Contact DiAndria Green, Partner in Bennett Thrasher’s State and Local Tax (SALT) practice, or call us at 770.396.2200.
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