The online versions of legislation provided on this website are not official. Enrolled bills are the final version passed by the Ohio General Assembly and presented to the Governor for signature. The official version of acts signed by the Governor are available from the Secretary of State's Office in the Continental Plaza, 180 East Broad St., Columbus.
S. B. No. 143As IntroducedAs Introduced
|124th General Assembly|
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
To enact sections 5740.01 to 5740.08 of the Revised
Code and to repeal Section 6 of Sub. H.B. 483 of
the 123rd General Assembly to enact the Simplified
Sales and Use Tax Administration Act.
Section 1. That sections 5740.01, 5740.02, 5740.03, 5740.04,
5740.05, 5740.06, 5740.07, and 5740.08 of the Revised Code be
enacted to read as follows:
Sec. 5740.01. As used in this chapter:
(A) "Agreement" means the streamlined sales and use tax
agreement as amended and adopted on January 27, 2001, by the
national conference of state legislatures' special task force on
state and local taxation of telecommunication and electronic
commerce, and unanimously adopted by the national conference of
state legislatures' executive committee.
(B) "Certified automated system" means software certified
jointly by the states that are signatories to the agreement to
calculate the sales or use 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 transaction.
(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 and use tax functions.
(D) "Person" means an individual, trust, estate, fiduciary,
partnership, limited liability company, limited liability
partnership, corporation, or any other legal entity.
(E) "Sales tax" means the tax levied by division (A) of
section 5739.02 or section 5739.021, 5739.023, 5739.026, or
5739.10 of the Revised Code.
(F) "Seller" means any person making sales, leases, or
rentals of personal property or services.
(G) "State" means any state of the United States and the
District of Columbia.
(H) "Use tax" means the tax levied by section 5741.02,
5741.021, 5741.022, or 5741.023 of the Revised Code.
Sec. 5740.02. The tax commissioner shall participate in
discussions with other states regarding the development of a
simplified sales and use tax system to reduce the burden and cost
for all sellers to collect this state's sales and use taxes. The
commissioner also shall participate in multi-state discussions to
review or amend the terms of the agreement to simplify and
modernize sales and use tax administration that embodies the
simplification requirements set forth in section 5740.05 of the
Revised Code. For purposes of these discussions, the commissioner
or the commissioner's designee, and up to three other delegates
designated by the commissioner, shall represent this state.
Sec. 5740.03. (A) Subject to section 5740.05 of the Revised
Code, the tax commissioner may enter into the agreement with one
or more states. In furtherance of the agreement, the commissioner
may act jointly with other states that are members of the
agreement to establish standards for certification of service
providers and automated systems, establish performance standards
for multi-state sellers, and procure goods and services. The
commissioner may take other actions reasonably required to
implement this chapter, including adopting rules.
Sec. 5740.04. (A) No provision of the agreement, in whole or
in part, invalidates or amends the law of this state. Adoption of
the agreement by this state does not amend the law of this state.
Implementation in this state of any condition of the agreement,
whether adopted before, at, or after membership of this state in
the agreement, must be by the action of this state.
(B) The agreement 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 laws of each member state.
Sec. 5740.05. The tax commissioner shall not enter into the
agreement unless the agreement requires each state to meet the
requirements set forth in divisions (A) to (I) of this section.
The agreement shall:
(A) Set restrictions to limit over time the number of state
sales and use tax rates;
(B) Establish uniform standards for attributing the source
of transactions to taxing jurisdictions, the administration of
exempt sales, and sales and use tax returns and remittances;
(C) Provide a central, electronic registration system that
allows a seller to register to collect and remit sales and use
taxes for all signatory states;
(D) 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;
(E) Provide for
reduction of the burdens of complying with
local sales and use
taxes through the following:
(1) Restricting variances between the state and local tax
(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
(4) Providing notice to sellers and certified service
providers of changes in local sales and use tax rates and in the
boundaries of local taxing jurisdictions.
(F) Outline any monetary allowances that are to be provided
by the states to sellers or certified service providers. The
agreement must allow for a joint public and private sector study
of the compliance cost on sellers and certified service providers
to collect sales and use taxes for state and local governments
under various levels of complexity, to be completed by July 1,
(G) Require each state to certify compliance with the terms
of the agreement prior to becoming a member of the agreement, and
to maintain compliance, under the laws of the member state, with
all provisions of the agreement while a member;
(H) 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;
(I) Provide for the appointment of an advisory council of
private sector representatives and an advisory council of
non-member state representatives to consult with in the
administration of the agreement.
Sec. 5740.06. (A) The agreement binds and inures only to the
benefit of this state and the other member states. No person,
other than a signatory 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 division (A) of this section, 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 the application thereof, may
be declared invalid as to any person or circumstance on the ground
that the law or application of it is inconsistent with the
Sec. 5740.07. (A) A certified service provider is the agent
of the 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 taxes due each member state on all sales
transactions it processes for the seller, except as provided in
A seller that contracts with a certified service provider is
not liable to the state for sales or use taxes due on transactions
processed by the certified service provider, unless the seller
misrepresented the type of personal property or services it sells
or committed fraud. In the absence of probable cause to believe
that the seller made a material misrepresentation or has committed
fraud, the seller is not subject to audit of the transactions
processed by the certified service provider. A seller is subject
to audit for transactions not processed by a 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 provider.
(B) A person who provides a certified automated system is
responsible for the proper functioning of that system and is
liable to the state for underpayments of the sales and use tax
attributable to errors in the functioning of that system. A
seller that uses a certified automated system remains responsible
and is liable to the state for reporting and remitting sales and
(C) A seller that has a proprietary system for determining
the amount of sales or use tax due on transactions and has signed
a performance agreement establishing tax performance standards for
that system is liable for the failure of the system to meet the
Sec. 5740.08. (A) A certified service provider shall
preserve the privacy of consumers who buy, lease, or rent personal
property or services from sellers with whom the provider has
contracted for the collection and remittance of sales and use
taxes to this state. The provider shall use a certified automated
system to perform sales and use tax calculations, remittances, and
reporting that does not retain the personally identifiable
information of consumers, except as follows:
(1) To determine whether a consumer's status or intended
use of the goods or services purchased is exempt from the sales or
(2) To investigate fraud by a consumer or seller;
(3) To the extent necessary to ensure the reliability of
the providers' technology and certified automated system in
performing all of a seller's sales and use tax functions.
The provider shall provide technical, physical, and
administrative safeguards to protect personally identifiable
information from unauthorized access and disclosure.
(B) A certified service provider shall provide to consumers
clear and conspicuous notice of its information retention and
sharing practices, including what information it collects, how the
information collected is used, and whether the information is
disclosed to other states that are members to the agreement. A
provider that retains personally identifiable information in
accordance with division (A) of this section shall notify
consumers of its intent to retain such information and shall
afford consumers reasonable access to their data and the
opportunity to correct inaccurately recorded data.
(C) If any person, other than a state that is a member of
the agreement, seeks to discover a consumer's personally
identifiable information, a reasonable and timely effort shall be
made by the provider to notify the consumer of such request.
(D) Notwithstanding this section, the laws of this state
regarding the collection, use, and maintenance of confidential
taxpayer information remain applicable and binding. The agreement
does not enlarge or limit this state's authority to do any of the
(1) Conduct audits or other reviews as provided under the
agreement or state law;
(2) Provide records pursuant to section 149.03 of the
Revised Code or to governmental agencies under disclosure laws;
(3) Prevent the disclosure of confidential taxpayer
information in accordance with Title 57 of the Revised Code;
(4) Prevent, consistent with federal law, the disclosure or
misuse of federal return information obtained under a disclosure
agreement with the Internal Revenue Service;
(5) Collect, disclose, disseminate, or otherwise use
anonymous data for governmental purposes.
(E) This section does not enlarge or limit the privacy
policies of any seller that has selected a certified service
provider as its agent to perform all of the seller's sales and use
(F) A certified service provider that fails to comply with
this section is subject to investigation by the tax commissioner
or his agents and the attorney general, and prosecution by the
Section 2. That Section 6 of Sub. H.B. 483 of the 123rd
General Assembly is hereby repealed.