• Ohio: Governor Kasich Signs Executive Order Simplifying Sales Tax System
  • July 16, 2013 | Authors: David M. Kall; Susan Millradt McGlone
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • On July 9, 2013, Ohio Governor John Kasich signed Executive Order 2013-09K, which directed the state tax commissioner to apply for full membership in the Streamlined Sales and Use Tax Project (SSUTP). The SSUTP was created in 1999 by the National Governor’s Association and the National Conference of State Legislatures to simplify sales tax collection across state lines and to encourage “remote sellers” to collect and remit state sales taxes.

    Since October of 2005, Ohio has had a more limited associate membership in the SSUTP because Ohio’s origin sourcing rules for interstate sales were in conflict with the rules provided by the Streamlined Sales and Use Tax Agreement (SSUTA). Recently, the SSUTA was amended to eliminate this conflict and make it possible for more states to become full members in the SSUTP.

    The governor’s office stated that “ [t]he full membership status made possible through the Executive Order will continue the push by Gov. Kasich to modernize Ohio’s overall tax structure. Creating a more business-friendly sales tax system and simplifying the collection of sales tax across the state will be especially helpful to retailers operating in multiple states.”

    In addition, under the proposed Marketplace Fairness Act being considered by Congress, states that have adopted the SSUTA may require all sellers to collect and remit sales and use taxes with respect to remote sales made to such state’s residents, provided the SSUTA includes certain minimum sales tax simplification requirements. Ohio’s full membership in the SSUTP should put Ohio in a position to collect Ohio sales taxes from such remote sellers if the Marketplace Fairness Act is passed by Congress. Nonetheless, Governor Kasich recently vetoed an item in the state budget that would have required out-of-state online sellers to collect sales tax from Ohio residents, preferring to wait to take such action when Congress passes the Marketplace Fairness Act or similar legislation.