297A.995 UNIFORM SALES AND USE TAX ADMINISTRATION ACT.
Subdivision 1. Title.
This section may be cited as the Uniform Sales and Use Tax
Subd. 2. Definitions.
As used in this section:
(a) "Agreement" means the Streamlined Sales and Use Tax Agreement.
(b) "Certified automated system" means software certified jointly by the states that are
signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction,
determine the amount of tax to remit to the appropriate state, and maintain a record of the
(c) "Certified service provider" means an agent certified jointly by the states that are
signatories to the agreement to perform all of the seller's sales tax functions.
Subd. 3. Legislative finding.
The legislature finds that this state should enter into an
agreement with one or more states to simplify and modernize sales and use tax administration
in order to substantially reduce the burden of tax compliance for all sellers and for all types of
Subd. 4. Authority to enter agreement.
The commissioner of revenue is authorized and
directed to enter into the agreement with one or more states to simplify and modernize sales
and use tax administration in order to substantially reduce the burden of tax compliance for all
sellers and for all types of commerce. In furtherance of the agreement, the commissioner is
authorized to act jointly with other states that are members of the agreement to establish standards
for certification of a certified service provider and certified automated system and establish
performance standards for multistate sellers.
The commissioner of revenue is further directed to negotiate the agreement with the express
intention of ensuring uniform sales and use taxation as applied to like-kind transactions.
The commissioner is further authorized to take other actions reasonably required to
implement the provisions set forth in this article. Other actions authorized by this section include,
but are not limited to, the adoption of rules and regulations and the joint procurement, with other
member states, of goods and services in furtherance of the cooperative agreement.
The following officials are authorized to represent this state before the other states that are
signatories to the agreement:
(1) the commissioner or the commissioner's designee;
(2) the chair of the house committee with jurisdiction over taxes or the house chair's
(3) the chair of the senate committee with jurisdiction over taxes or the senate chair's
Subd. 5. Relationship to state law.
No provision of the agreement authorized by this bill
in whole or part invalidates or amends any provision of the law of this state. Adoption of the
agreement by this state does not amend or modify any law of this state. Implementation of any
condition of the agreement in this state, whether adopted before, at, or after membership of this
state in the agreement, must be by the action of this state.
Subd. 6. Agreement requirements.
The commissioner of revenue shall not enter into the
agreement unless the agreement requires each state to abide by the following requirements:
(a) Uniform state rate.
The agreement must set restrictions to achieve more uniform state
rates through the following:
(1) limiting the number of state rates;
(2) eliminating maximums on the amount of state tax that is due on a transaction; and
(3) eliminating thresholds on the application of state tax.
(b) Uniform standards.
The agreement must establish uniform standards for the following:
(1) the sourcing of transactions to taxing jurisdictions;
(2) the administration of exempt sales;
(3) the allowances a seller can take for bad debts; and
(4) sales and use tax returns and remittances.
(c) Uniform definitions.
The agreement must require states to develop and adopt uniform
definitions of sales and use tax terms. The definitions must enable a state to preserve its ability to
make policy choices not inconsistent with the uniform definitions.
(d) Central registration.
The agreement must provide a central, electronic registration
system that allows a seller to register to collect and remit sales and use taxes for all signatory states.
(e) No nexus attribution.
The agreement must provide that registration with the central
registration system and the collection of sales and use taxes in the signatory states will not be used
as a factor in determining whether the seller has nexus with a state for any tax.
(f) Local sales and use taxes.
The agreement must provide for reduction of the burdens of
complying with local sales and use taxes through the following:
(1) restricting and eliminating variances between the state and local tax bases;
(2) requiring states to administer any sales and use taxes levied by local jurisdictions within
the state so that sellers collecting and remitting these taxes will not have to register or file returns
with, remit funds to, or be subject to independent audits from local taxing jurisdictions;
(3) restricting the frequency of changes in the local sales and use tax rates and setting
effective dates for the application of local jurisdictional boundary changes to local sales and
use taxes; and
(4) providing notice of changes in local sales and use tax rates and of changes in the
boundaries of local taxing jurisdictions.
(g) Monetary allowances.
The agreement must outline any monetary allowances that are to
be provided by the states to sellers or certified service providers.
(h) State compliance.
The agreement must require each state to certify compliance with
the terms of the agreement prior to joining and to maintain compliance, under the laws of the
member state, with all provisions of the agreement while a member.
(i) Consumer privacy.
The agreement must require each state to adopt a uniform policy for
certified service providers that protects the privacy of consumers and maintains the confidentiality
of tax information.
(j) Advisory councils.
The agreement must provide for the appointment of an advisory
council of private sector representatives and an advisory council of nonmember state
representatives to consult with in the administration of the agreement.
Subd. 7. Cooperating sovereigns.
The agreement authorized by this bill is an accord among
individual cooperating sovereigns in furtherance of their governmental functions. The agreement
provides a mechanism among the member states to establish and maintain a cooperative,
simplified system for the application and administration of sales and use taxes under the duly
adopted law of each member state.
Subd. 8. Limited binding and beneficial effect.
(a) The agreement authorized by this
bill binds and inures only to the benefit of this state and the other member states. No person,
other than a member state, is an intended beneficiary of the agreement. Any benefit to a person
other than a state is established by the law of this state and the other member states and not by
the terms of the agreement.
(b) Consistent with paragraph (a), no person shall have any cause of action or defense under
the agreement or by virtue of this state's approval of the agreement. No person may challenge, in
any action brought under any provision of law, any action or inaction by any department, agency,
or other instrumentality of this state, or any political subdivision of this state, on the ground that
the action or inaction is inconsistent with the agreement.
(c) No law of this state, or its application, may be declared invalid as to any person or
circumstance on the ground that the provision or application is inconsistent with the agreement.
Subd. 9. Seller and third-party liability.
(a) A certified service provider is the agent of a
seller, with whom the certified service provider has contracted, for the collection and remittance
of sales and use taxes. As the seller's agent, the certified service provider is liable for sales and use
tax due each member state on all sales transactions it processes for the seller except as set out
in this section.
A seller that contracts with a certified service provider is not liable to the state for sales or use
tax due on transactions processed by the certified service provider unless the seller misrepresented
the type of items it sells or committed fraud. In the absence of probable cause to believe that the
seller has committed fraud or made a material misrepresentation, the seller is not subject to
audit on the transactions processed by the certified service provider. A seller is subject to audit
for transactions not processed by the certified service provider. The member states acting jointly
may perform a system check of the seller and review the seller's procedures to determine if the
certified service provider's system is functioning properly and the extent to which the seller's
transactions are being processed by the certified service provider.
(b) A person that provides a certified automated system is responsible for the proper
functioning of that system and is liable to the state for underpayments of tax attributable to errors
in the functioning of the certified automated system. A seller that uses a certified automated
system remains responsible and is liable to the state for reporting and remitting tax.
(c) A seller that has a proprietary system for determining the amount of tax due on
transactions and has signed an agreement establishing a performance standard for that system is
liable for the failure of the system to meet the performance standard.
Subd. 10. Relief from certain liability.
Notwithstanding subdivision 9, sellers and certified
service providers are relieved from liability to the state for having charged and collected the
incorrect amount of sales or use tax resulting from the seller or certified service provider (1)
relying on erroneous data provided by this state on tax rates, boundaries, or taxing jurisdiction
assignments, or (2) relying on erroneous data provided by the state in its taxability matrix
concerning the taxability of products and services.
History: 1Sp2001 c 5 art 12 s 84; 2002 c 377 art 3 s 19; 2003 c 127 art 1 s 31