Streamlined Sales Tax: Terms and Definitions

Associate Member States – There are two types of associate member states:

  1. A state may fully comply with the Streamlined Sales and Use Tax Agreement.
  2. A state may comply with the majority of the Streamlined Sales and Use Tax Agreement; however, some laws may not be compliant.

(Full) Member State – A state whose laws fully comply with the Streamlined Sales Tax Agreement.

Governing Board – The Governing Board is made up of representatives from all
full member states and associate member states.

Destination Sales Tax/Destination Sourcing – Sales tax is owed to the state where the product is delivered.

Certified Service Provider (CSP) – The Governing Board certifies service providers to provide services for Model 1 sellers.

Certified Automated Software (CAS) – The Governing Board approves and certifies software. Example: A company buys a certified software program to file a return. Certified software is referenced in Model 2.

Models – There are four models of sellers (1, 2, 3 and other). When businesses register they will choose their model (or filing method):

Model 1 – Contracts with a Certified Service Provider.
Model 2 – Business use Certified Software.
Model 3 – Business creates an internal software program to file their return.*
Model 4 (Other) – Business files return without using a CSP or any Certified Software.

*To register as a Model 3, the business must have sales revenue of more than $500 M annually and do business in at least five of the member states.