CONTACT: Scott Peterson, Interim Executive Director (605) 773-3311…

CONTACT:

Scott Peterson, Interim Executive Director
(605) 773-3311
Scott.Peterson@state.sd.us


Sales Tax Simplification Agreement Becomes Effective Today and Launches Key Element:
Amnesty Program

The Streamlined Sales and Use Tax Agreement (Agreement), a multi-state agreement providing for
simplification of the nation's varying sales tax laws, became effective today, marking the beginning of
one of its key components, the amnesty program. The Agreement is the culmination of a multi-year,
nationwide effort by 44 states, the District of Columbia, local governments and members of the business
community to develop measures to design, test and implement a system that radically simplifies sales
and use tax collection and administration by retailers and states. The Agreement takes effect just shy of
three years from its initial approval date on Nov. 12, 2002.

Today's effective date of the Agreement triggers a Web-based centralized point of sales tax registration
for the member states (https://www.sstregister.org/sellers), an amnesty period for sellers that have not
been contacted by member states for audit, and finalizes the process for certification of software that will
assist in sales tax collection responsibilities. The simplified system reduces the number of sales tax
rates, brings uniformity to definitions of items in the sales tax base, significantly reduces the paperwork
burden on retailers, and incorporates new technology to modernize many administrative procedures.

Full-member Streamlined states include Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota,
Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia.
Associate-member states are Arkansas, Ohio, Tennessee, Utah and Wyoming. Nevada will become an
Associate-member state on January 1, 2006. It is anticipated that other states will become members as
this effort moves forward.

"Today's launch of the Streamlined Agreement brings the tireless work of so many from the state and
local government communities and the business sector to fruition in the form of a more rational and
efficient sales tax system for the nation as a whole," said Dwight Cook, president of the newly-formed
Streamlined Sales Tax Governing Board, Inc., a not-for-profit entity established to manage and
administer the Streamlined Sales and Use Tax Agreement.

Amnesty Program
The amnesty program will be available in all states participating as full members or associate members
of the Streamlined Sales and Use Tax Agreement. Amnesty is available for sales or use taxes
uncollected or unpaid on sales by retailers for any period prior to registration through the Streamlined
Sales and Use Tax Central Registration System. Sellers who are not currently registered to collect sales
taxes in a member state and who volunteer to collect or pay sales or use taxes in the member states by
registering through the Streamlined Sales and Use Tax Central Registration System. While current law
does not require e-commerce and direct mail companies to collect and remit sales taxes on transactions
that occur in jurisdictions where they do not have a physical presence, the states expect some of these
companies may come forward and volunteer to collect taxes under the simplified system.


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Sales Tax Simplification Agreement Becomes Effective Today/Page 2
For full member states, the amnesty period will end on Sept. 30, 2006, unless a state otherwise provides
for amnesty. For associate member states, the period will vary depending on the effective date of their
compliance with the Streamlined Sales and Use Tax Agreement.

A seller is not eligible in a member state if:
   · The seller is currently registered in the member state to collect sales and use tax, or
   · The seller had been registered in the member state within 12 months of the state becoming a
        member state, or
   · The seller has received notice of an audit by the member state and the audit is not yet fully
        resolved, including any related administrative and judicial processes.

The following are excluded from the amnesty:

   Sales or use taxes owed by the seller in its capacity as a buyer
   Sales or use taxes already paid or remitted to member states in which the seller was registered
   Sales or use taxes collected by the seller that are unpaid to member states
   Liability for taxes other than sales or use taxes

INFORMATION OBTAINED THROUGH THE STREAMLINED REGISTRATION SYSTEM MAY NOT BE
AND WILL NOT BE USED BY THE MEMBER STATE FOR DETERMINING NEXUS FOR OTHER
TAXES.

How amnesty works:

After Oct. 1, 2005, the seller visits the Web site of the Streamlined Sales and Use Tax Central
Registration System (https://www.sstregister.org/sellers) to register to collect taxes for the member states
in which the seller makes sales.

The information provided by the seller will be sent electronically to all of the full member states and to
associate member states for which the seller has chosen to collect the sales or use tax.

The amnesty provisions in the Agreement require that a seller must maintain its registration and continue
to collect and remit applicable sales and use taxes for at least 36 months after the date of registration
through the Streamlined Sales and Use Tax Central Registration System in a member state.

Amnesty will be available for a seller who registers through the Central Registration System and
indicates its intent to use a Certified Service Provider (Model 1). Since Certified Service Providers are
not available at this time, the Governing Board expressed its intent to allow sellers to register and delay
collection responsibility until such time as the Certified Service Provider service is available. Amnesty
will be provided throughout this time frame.

If a registration is not maintained for the required 36 months or if a seller is found to have committed
fraud or intentional misrepresentation in the application, the amnesty agreement may be voided by the
member state.

Individuals and companies seeking more information on the Streamlined Sales and Use Tax Agreement
and the new simplified system can refer to the Web site at www.streamlinedsalestax.org.

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