Will any origin-based sourcing SST states remain 01-01-10?

One of the chief concerns among several SST member states – including Arizona, New Mexico, Ohio, Tennessee, Texas, Utah, and Virginia, as well as the Virginia Association of Counties – is whether the option to have origin-based sourcing rules will remain once the scheduled January 1, 2010 expiration date has come and gone. The states and county association listed above requested more information from the SST Compliance Review and Interpretations Committee early this summer to prepare for the decision, whichever way it turns.

If the original SST Agreement requires destination-based sourcing for each of its full member states, how did we get here? We need to look back to the December 2007 compromise agreement in which the SST Governing Board agreed to allow various associate member states, by amending the Agreement, to allow states to use origin-based sourcing rules until the associate state was to become a full SST member if certain factors were present – one of which was that five or more states are using origin-based sourcing and were otherwise in substantial compliance with the SST Agreement.

As it stands today, Ohio, Tennessee, and Utah meet these standards, but the question is whether two other states will do so by the New Year. The states and association listed above asked for a clarification as to whether the 2007 amendments to the SST Agreement indicate that the exception to the rule – origin-based rather than destination-based – will expire with the New Year or whether it will trigger the exception to the rule.

This is a key interpretation, and the Committee preliminarily answered in mid-August that it will expire. The issue may be further explored at the annual meeting of the full board held this year in Oklahoma City at the end of September.