Streamlined Sales Tax Project Adopts New Sourcing Rules
In December, the National Streamlined Sales Tax Governing Board adopted changes to the project's sales tax sourcing rules that might lure Texas back into full project participation. Texas currently does not participate in the project because of cities' concerns about the requirement that participating states must switch to "destination" sales tax sourcing, rather than "origin" sourcing, as Texas law currently provides.
While the new sourcing rules would generally permit states such as Texas to continue sourcing sales taxes at the origin city (where the order is received), there appears to be a potentially significant change. Sourcing at cities that ship goods from certain warehouses would no longer be permitted; the place where the order is received (including a warehouse, if the order is received there) would always receive the sales taxes on that particular kind of order.
The new sourcing rules would apply only if the Texas Legislature passes legislation bringing Texas into conformance with the Streamlined Project's model legislation. The TML staff will present this issue to the appropriate TML legislative policy committee for full consideration.,/
A copy of the new rules can be read here: http://www.tml.org/legal_pdf/2008sourcing.pdf