When your business sells in several US states, sales tax can get complicated quickly. Each state has its own definitions, rules, filing systems, and enforcement policies. Streamlined Sales Tax (SST) can make that chaos a little more manageable. And SST is especially important for businesses that are selling into multiple states but don’t plan to build out a tax team in every one.

Not all states participate in SST, but for those that do, it can reduce compliance burdens in tangible ways—fewer filings, simpler rules, and subsidized automation. Below, we’ll cover how Streamlined Sales Tax works, whom it’s built for, and how to make it work for your business.

What’s in this article?

• What is Streamlined Sales Tax (SST)?
  
• Which states participate in Streamlined Sales Tax?
  
• Who qualifies for Streamlined Sales Tax registration?
  
• How does Streamlined Sales Tax benefit businesses?
  
• What are the challenges of Streamlined Sales Tax?
  
• How Stripe Tax can help
  

What is Streamlined Sales Tax (SST)?

Sales tax in the US is a fragmented system. Every state has its own rules, and local governments often layer on more. If you sell in multiple states, you can find yourself stitching together a patchwork of thresholds, forms, and deadlines.

The Streamlined Sales and Use Tax Agreement (SSUTA) was created to reduce that friction. SSUTA is a voluntary initiative to make sales tax systems more consistent across states. Twenty-four states have signed on so far. Together, they’ve built a shared framework around standardized definitions for taxable goods and services, uniform sourcing rules so you know whether to tax based on where an item is shipped or where it’s coming from, and state-level filing instead of filing with each local tax authority.

SST doesn’t create a tax or change what’s taxable—it makes tax law easier to deal with if you’re doing business in multiple states. The program partners with Certified Service Providers (CSPs), which are certified agents that can calculate, collect, and remit tax on your behalf. If you’re a remote seller and qualify as a CSP-compensated seller (a person or business who is registered with SSUTA and meets other eligibility requirements), many states will compensate CSPs to offer you tax services for free.

Though SST is not a complete fix for the fragmented state of US sales tax, it is a cleaner, more predictable way to handle your tax obligations in several states.

Which states participate in Streamlined Sales Tax?

Twenty-four states have adopted the Streamlined Sales and Use Tax Agreement.

These 23 states are full members:

• Arkansas
  
• Georgia
  
• Indiana
  
• Iowa
  
• Kansas
  
• Kentucky
  
• Michigan
  
• Minnesota
  
• Nebraska
  
• Nevada
  
• New Jersey
  
• North Carolina
  
• North Dakota
  
• Ohio
  
• Oklahoma
  
• Rhode Island
  
• South Dakota
  
• Utah
  
• Vermont
  
• Washington
  
• West Virginia
  
• Wisconsin
  
• Wyoming
  

Tennessee is an associate member: it’s partially compliant and working toward full adoption.

These states cover about 33% of the US population. You can register with one or all of them through a single application via the Streamlined Sales Tax Registration System (SSTRS).

Major markets such as California, Texas, Florida, and New York haven’t joined. You still need separate systems for states that aren’t members.

Who qualifies for Streamlined Sales Tax registration?

Any seller can register for SST. You don’t need a specific revenue threshold or special invitation. If you sell into one or more participating states, you can sign up through the SSTRS and get sales tax permits in any or all member states at once.

Not all sellers are treated the same under SST. There’s a distinction between remote sellers, who don’t have a physical presence in a particular state but sell products or services to be delivered there, and in-state sellers, who have a local presence such as an office, employees, warehouses, or other operations.

If you’re a remote seller, you might qualify as a CSP-compensated seller, which can lead to major perks such as free tax services. To be considered a CSP-compensated seller, within the past year, your business must have had no fixed place of business in the state for more than 30 days, less than $50,000 in property or payroll there, and no more than 25% of total businesswide property or payroll in that state.

If you meet those criteria, you qualify. If not, you can still register through SSTRS without the free CSP benefits. Note that eligibility is decided state by state, so you might qualify in some states and not others.

How does Streamlined Sales Tax benefit businesses?

For businesses selling across state lines, SST makes registrations, calculations, filings, and audits easier. Here are some of the main benefits:

• Fewer registrations: Through the SSTRS, you can register in all 24 member states at once. You can add or remove states later from the same dashboard. That’s a significant shift if you’re expanding to new regions and don’t want to manage separate forms and filings for every state.

• State-paid tax services: If you’re a remote CSP-compensated seller, SST states will usually cover the cost of a CSP. These vetted providers handle tax calculations, real-time rate lookups, returns prep and filing, and audit support. Over 29% of businesses registered with the SSTRS contract with a CSP, which saves businesses money and internal headcount.

• Simplified tax rules: Because SST states follow a common playbook, the taxability of goods and services is more predictable. Though tax rates aren’t the same on each type of goods in each member state, the definitions are consistent (e.g., “food” or “digital goods” will mean the same thing across member states), and sourcing rules match. You spend less time double-checking edge cases.

• Reduced audit exposure: If you use a CSP and qualify as a CSP-compensated seller, you’re typically protected from liability if the CSP makes an error. If there is an audit, in many cases the CSP will handle it.

• A more scalable tax operation: The real benefit of SST is that it saves you time and energy. Instead of reinventing your sales tax workflow when you enter a new state, you build one system that scales.

What are the challenges of Streamlined Sales Tax?

SST makes sales tax simpler, but there are still considerations to note—especially if you’re operating in SST and non-SST states. Here’s why businesses must stay diligent:

• SST is not nationwide: Only 24 states participate, and major markets such as California, Texas, New York, and Florida don’t. You’ll still need separate tax setups for those states.

• Over-registration risk: When you register through SST, you choose the states you sign up for. But once you’re registered in a state, you’re expected to file returns, even if you had no sales. “Zero returns” can add up fast if you register in places you’re not actively selling, so it’s better to be selective.

• No vendor discounts: Some states offer vendor compensation, a small percentage of collected tax you keep for filing on time. If you use a CSP through SST, you will probably waive that credit. The tradeoff between automation and lost discounts can matter if you’re a high-volume seller.

• Less visibility and control: Using a CSP means handing off the work and a lot of day-to-day visibility. You rely on someone else’s timelines, tooling, and accuracy. If something breaks, you’re dependent on their response time and audit readiness.

SST can be a big win for businesses, but it’s not a hands-off system. The value comes from knowing when to lean on the system and when you still need to stay close to the details.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, value-added tax (VAT), and goods and services tax (GST) on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.