Part G. Authority to Participate in Multistate Efforts to Develop Sales and Use Taxes.

§ 1–301.121. Definitions.

For the purposes of this part, the term:

(1) “Agreement” means the Streamlined Sales and Use Tax Agreement as amended and adopted on January 27, 2001.

(2) “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 transaction.

(3) “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.

(4) “Person” means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity.

(5) “Sales Tax” means the tax levied under Chapter 20 of Title 47.

(6) “Seller” means any person making sales, leases, or rentals of personal property or services.

(7) “State” means any state of the United States and the District of Columbia.

(8) “Use Tax” means the tax levied under Chapter 22 of Title 47.

(June 25, 2002, D.C. Law 14-156, § 2, 49 DCR 4272.)

Emergency Legislation

For temporary (90 day) amendment of section, see § 1132 of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026).

For temporary (90 day) additions, see §§ 2 and 3 of Commission on Uniform State Laws Appointment Authorization Emergency Act of 2009 (D.C. Act 18-132, July 6, 2009, 56 DCR 5692).

For temporary (90 day) additions, see §§ 2 and 3 of Commission on Uniform State Laws Appointment Authorization Emergency Act of 2010 (D.C. Act 18-403, May 19, 2010, 57 DCR 4508).

For temporary (90 day) additions, see §§ 2 and 3 of Commission on Uniform State Laws Appointment Authorization Congressional Review Emergency Act of 2010 (D.C. Act 18-503, July 30, 2010, 57 DCR 7576).

Temporary Legislation

Sections 2 and 3 of D.C. Law 18-59 added sections to read as follows:

“(a) The official commissioners of the District of Columbia to the National Conference of Commissioners on Uniform State Laws (‘NCCUSL’) shall be members of the District of Columbia Bar, and shall be appointed as follows:

“(c) In addition to the 5 members appointed under this section, the following persons shall be members of the Commission:

Section 5(b) of D.C. Law 18-59 provided that the act shall expire after 225 days of its having taken effect.

Sections 2 and 3 of D.C. Law 18-215 added sections to read as follows:

“Sec. 2. Appointments to National Conference of Commissioners on Uniform State Laws.

“(a) The official commissioners of the District of Columbia to the National Conference of Commissioners on Uniform State Laws (’NCCUSL’) shall be members of the District of Columbia Bar, and shall be appointed as follows:

“(1) Three commissioners shall be appointed by the Mayor;

“(2) One commissioner shall be appointed by the Chairman of the Council; and

“(3) One commissioner shall be appointed by the Chief Judge of the Superior Court of the District of Columbia.

“(b) Each commissioner appointed pursuant to subsection (a) of this section shall serve a term of 3 years, beginning on July 1 of the year of appointment, and shall serve until his or her successor is appointed.

“(c) In addition to the 5 members appointed under this section, the following persons shall be members of the NCCUSL:

“(1) Any resident of the District of Columbia who, because of long service in the cause of the uniformity of state legislation, shall have been elected a life member of the NCCUSL; and

“(2) The General Counsel to the Council of the District of Columbia, or his or her designee.

“(d) A person serving as a NCCUSL commissioner as of the effective date of this act may continue to serve until the expiration of his or her term, or until a successor has been appointed, whichever occurs later.

“Sec. 3. Duties of commissioners.

“(a) The commissioners shall advise the Mayor and the Council, and Council committees, concerning:

“(1) Proposals for uniform and model state laws;

“(2) The effect that the proposals would have on the laws of the District of Columbia; and

“(3) Other matters pertinent to desirable uniformity in legislation between the District and other jurisdictions.

“(b) Each commissioner shall attend the meetings of the NCCUSL and, both within and out of the NCCUSL, do all in his or her power to promote uniformity in state laws in all subjects in which uniformity is desirable and practicable.

“(c) The commissioners shall report to the Council after each annual meeting, and from time to time thereafter as the commissioners consider proper.”

Section 5(b) of D.C. Law 18-215 provided that the act shall expire after 225 days of its having taken effect.

§ 1–301.122. Authority to participate in multistate negotiations.

(a) For the purposes of reviewing or amending the Agreement embodying the simplification requirements as contained in § 1-301.125, the District of Columbia shall enter into multistate discussions. For purposes of the discussions, the District of Columbia shall be represented by 4 delegates.

(b) The Mayor shall appoint one delegate to serve at the pleasure of the Mayor.

(d) The Chief Financial Officer of the District of Columbia (“Chief Financial Officer”) shall appoint one delegate to serve at the pleasure of the Chief Financial Officer.

(e) The Council on State Taxation shall appoint one tax counsel to serve as a delegate of the District of Columbia. The Council on State Taxation shall notify the Mayor and the Chairman of the Council of the appointment by registered mail.

§ 1–301.123. Authority to enter into agreement.

(a) The Chief Financial Officer may 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 Chief Financial Officer may 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.

(b) The Chief Financial Officer may take other actions reasonably required to implement the provisions set forth in this part. Other actions authorized by this section include the adoption of rules and regulations and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement.

(c) The Chief Financial Officer, or his or her designee, may represent the District of Columbia before the other states that are signatories to the Agreement.

§ 1–301.124. Relationship to District of Columbia law.

No provision of the Agreement shall, in whole or part, invalidate or amend any provision of the law of the District of Columbia. Adoption of the Agreement by the District of Columbia shall not amend or modify any law of the District of Columbia. Implementation of any condition of the Agreement in the District of Columbia, whether adopted before, at, or after membership of the District of Columbia in the Agreement, shall be by the action of the Council.

§ 1–301.125. Agreement requirements.

The Chief Financial Officer shall not enter into the Streamlined Sales and Use Tax Agreement unless the Agreement addresses the following issues:

(1) The Agreement shall set restrictions to limit over time the number of state rates.

(2) The Agreement shall establish uniform standards for the sourcing of transactions to taxing jurisdictions; the administration of exempt sales; and sales and use tax returns and remittances.

(3) The Agreement shall provide a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.

(4) The Agreement shall 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.

(5) The Agreement shall provide for reduction of the burdens of complying with local sales and use taxes through the following:

(A) Restricting variances between the state and local tax bases;

(B) 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;

(C) 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

(D) Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.

(6) The Agreement shall outline any monetary allowances that are to be provided by the states to sellers or Certified Service Providers. The Agreement shall 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, 2002.

(7) The Agreement shall 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.

(8) The Agreement shall 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.

(9) The Agreement shall 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.

§ 1–301.126. Cooperating sovereigns.

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 law of each member state.

§ 1–301.127. Limited binding and beneficial effect.

(a) The Agreement shall bind and inure only to the benefit of the District of Columbia 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 shall be established by the law of the District of Columbia and the other member states and not by the terms of the Agreement.

(b) Consistent with subsection (a) of this section, no person shall have any cause of action or defense under the Agreement or by virtue of the District of Columbia’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 the District of Columbia, or any political subdivision of the District of Columbia, on the ground that the action or inaction is inconsistent with the Agreement.

(c) No law of the District of Columbia, or the application thereof, shall be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the Agreement.

§ 1–301.128. Seller and third party liability.

(a) A Certified Service Provider shall be 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 shall be liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set forth in this section. A seller that contracts with a Certified Service Provider shall not be 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 shall not be subject to audit on the transactions processed by the Certified Service Provider. A seller shall be 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 shall be responsible for the proper functioning of that system and shall be 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 shall be 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 shall be liable for the failure of the system to meet the performance standard.