Jan 02 2014

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“Main Street Fairness”: More Taxation Without Representation (Part 3)


This article is Part 3 in a series about “Main Street Fairness” internet sales tax legislation. Since the issue is complex (yes…when aren’t they anymore?!), we recommend reading them in sequence. Other articles in the series:

“The Tax-Man’s Tangled Web – Exposing the ‘Main Street Fairness’ Act”

State Sales Tax Law Sameness is “Main Street Fairness”??? (Part 2)

Readers will recall that Part 2 explained that Michigan’s “Main Street Fairness” legislation is part of a policy agenda begun in 2000, which has resulted in significant changes to Michigan’s and 23 other states’ sales and use tax codes (and some changes to tax code, generally), to become fully complying and official members in an interstate compact-like entity governed by the Streamlined Sales and Use Tax Agreement, the SSUTA.

To become complying members, Michigan’s and other participating states’ legislators had significant impact on business owners by making those significant changes. And to remain compliant with SSUTA state lawmakers’ hands are virtually tied – they’ve abdicated control of state sales and use tax laws to the SSUTA.

SSUTA’s provisions and impact are disturbing enough on their own. Unfortunately, it gets worse.

Streamlined Sales Tax Governing Board Home page snap 092613

Just WHAT / WHO is the Streamlined Sales Tax Governing Board, Inc.???? Click to visit the entity’s website…


SSUTA created “Streamlined Sales Tax Governing Board, Inc.” which, among other things, oversees state “compliance” with the SSUTA.

Duties and powers of the Governing Board, are, as stated in the Bylaws:

may take any action that is necessary and proper to fulfill the purposes of the Agreement including but not limited to employing staff, advisors, consultants or agents and allocating the cost of administering the Agreement among the Member States.”

Based on my examination of the current version of the SSUTA, the Governing Board’s duties and powers include (loosely stated and/or paraphrased):

  • Providing an online registration venue for taxpayers (merchants, sellers of goods)
  • Certification and audits of computer software providers for software used to calculate, file and remit taxes due
  • Certification and audits of taxpayers registered in the system
  • Promulgation of rules determined by committees of the Governing Board corporation
  • Compilation and reporting of changes to the SSUTA, its rules, and Bylaws
  • Issuance of legal opinions regarding the agreement, rules, and Bylaws, and in answering questions from member states

SSUTA Governing Board, Inc. has a physical office in Wisconsin, a full-time staff, eight committees, two councils, and one work group. Here’s my best attempt at a one sentence description:

The Streamlined Tax Governing Board is something like a multi-state Revenue or Treasury Department.

If you are wondering how and why there could or should lawfully or rightfully be a multi-state quasi Revenue Department, and include in your wonderment the question, “Don’t we already have a FEDERAL government with an Internal Revenue  Service?”…I’d say that you’re asking some very pertinent questions.

While we can only imagine the full impact of SSUTA, due to its creation and operation “under the radar”, I’ve read significant portions of the *200+ pages* of SSUTA’s current version and skimmed through the remainder. While it’s impossible at present to conduct a comprehensive analysis, I will point to several obvious concerns that jumped off SSUTA’s pages:

  • Broad, vague statements regarding authority and powers granted to the Governing Board and its committees
  • No apparent requirements for any review by member states’ legislatures at any interval
  • No sunset, requirement for periodic reauthorization
  • Member states are deemed by compliant…or not…you’re either in or you’re out…in other words, the Governing Board controls…the States don’t seem to control the Governing Board now that it exists
  • Taxpayers from member states pay expenses of SSUTA’s operations
The Destruction of Tea at Boston Harbor by Nathaniel Currier, 1846

Perhaps my recollection of history is just…faulty…? Didn’t a revolution happen in this country due to TAXATION WITHOUT REPRESENTATION…? How different is empowering a distant entity to administer state sales tax code policy to being governed by a far away island? (Painting The Destruction of Tea at Boston Harbor by Nathaniel Currier, 1846, depicting the Boston Tea Party, December 16, 1773)

Among the migraine-inducing list of things wrong with the entire concept and operation of SSUTA and the Governing Board it created, is that it is functioning ILLEGALLY, here’s why:

  • The SSUTA violates Article I, Section 10, Clause 3 of the U.S. Constitution, which says: “No State shall, without the Consent of Congress,enter into any Agreement or Compact with another State…
  • Supreme Court decisions in 1967 and 1992 RIGHTFULLY upheld the constitutional prohibition on states’ attempts to regulate interstate commerce. The issue has not be revisited by the Court since and Congress has not acted to change laws prohibiting such state action.
  • Because SSUTA is an interstate compact, which requires Congressional approval under Article I, Section 10, Clause 3, and it involves interstate commerce, it should never have commenced operation without Congressional approval.

INEXPLICABLY THEN – 24 State Legislatures…

  • Agreed to and did change state laws which included approval of SSUTA articles of incorporation and the creation of a Governing Board and endorsed the commencement of operations.
  • Endorsed the creation and operation of SSUTA without the constitutional-required Congressional approval.
  • Accept SSUTA Governing Boar’s active operations, thereby lending credibility to it, as if it has legitimate legal authority.

In addition, it should be noted that SSUTA member state revenue departments, advocates, some media outlets and tax advisors, publish information regarding taxpayer (business owners who sell goods) registration with SSUTA, the collection and payment of sales tax through SSUTA, as if it is legally legitimate, and even legally required. Such insinuations are doubly wrong when made regarding remote sellers – those who don’t have the traditionally required presence in a state to be considered subject to sales and use tax laws.

At most, SSUTA member states, including Michigan, bury the fact that registration and filing are voluntary for remote sellers who don’t have the baseline required presence, in the “fine print” of F.A.Q.’s, etc. One can only wonder how many small and medium sized businesses are aware of the legal facts. 

SSUTA member states offer “amnesty” and “incentives” to retailers who “comply” with SSUTA registration, filing, and sales tax remittance. Companies have been offered waivers and selection of and connection with “certified service provider” software options to make filing and paying taxes “easier”. The waivers and amnesty are supposedly incentives: sellers of remote goods who register with SSUTA member states aren’t required to pay taxes from prior years.

An offer of amnesty is a reprieve offered to lawbreakers. Sellers of remote goods who don’t have adequate presence in a state aren’t legally required to pay / collect / remit sales tax. They don’t need amnesty because no law has been broken, but this is just an example of the sort of language employed to convince the world that SSUTA has legal authority and even benevolence. Never mind that such waiver and amnesty provisions explicitly state that sellers who register aren’t exempt from other potential tax liabilities – including, but not limited to income taxation.

Really, SSUTA moves towards taxation without representation in two ways. First, state lawmakers’ authority regarding significant portions of state tax codes is given to an outside entity, moving representation further away from those states’ citizens. Second, businesses outside of such states are subjected to taxation – not limited to, but including sales / use tax -  but have no representation in those states’ governments.

SSUTA’s unconstitutional active operations are, inexplicably lawbreaking that is “hiding in plain sight”, meaning that everyone from the SSUTA Governing Board itself to the Congressional Research Service (see the link above to the May 2013 report mentioned), acknowledges that Congressional approval is required and that it’s not been obtained, yet, there’s no mention of the obvious illegality of that fact. I’ve found nothing official written about SSUTA which even raises questions about the illegality of its active operation.

Perhaps someone should offer amnesty to the state officials involved as an inducement to cease operation of the SSUTA unless or until Congressional approval is obtained?


What are the causes for the phenomenon of seeing, hearing, and speaking no evil when it’s “hiding” in plain sight?

Unfortunately, there is a recent prevailing pattern at work here: if a government body or specific program is operating on very shaky legal ground, direct evidence of legally questionable elements are left out of official reports (see footnote 1) and seems to escape the attention of media outlets.

I’ll conclude with a few observations regarding the pattern of our officials’ “outsourcing” of authority and ongoing violations of law which go unreported and unchallenged:

  • CLEARLY, the government is already doing too much and too much legislation is getting passed, for citizens and even legislators to have a clue that such things are happening…how many people – including current state legislators – know anything about the SSUTA?
  • At all levels, from citizen to legislator, from bureaucrat to “reporter”, there is no skepticism about whether actions are CONSTITUTIONAL or LEGAL…if it’s happening…it must be OK
  • Since the only people who really know details about a policy like the SSUTA (or, for instance the health care law) are the very people who WANT the policy, facts and truth aren’t going to come from them.
  • Legislators are too busy towing their party’s line, attempting to please campaign donors, and saying “yes” to things to wrangle deals they want done, and calculating moves based on politics as a career, to carefully scrutinize details within the legislation they consider. Unless or until these paradigms are cracked, lawmakers will continue to approve legislation like SSUTA…it gives them fewer responsibilities and more time for party, fundraiser, and campaign events.



Three monkeys from OpenClipart.org

The Destruction of Tea at Boston Harbor by Nathaniel Currier, public domain



  1. The May CRS report doesn’t mention details about SSUTA member states’ ongoing efforts to make retailers believe payments are mandatory, it speaks of SSUTA in terms of states’ attempts to “streamline and simplify” tax laws, mentions particular provisions, and theorizes about potential impact should Congress choose to approve SSUTA.

Permanent link to this article: https://grassrootsmichigan.com/?p=3733

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