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Streamlined Sales Tax: Frequently Asked Questions

What is the purpose of the Streamlined Sales and Use Tax Agreement?
The purpose of the Agreement is to provide a road map for states who want to simplify and modernize sales and use tax administration in the member states in order to substantially reduce the burden of tax compliance. The Agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce through all of the following:

A. State level administration of sales and use tax collections.
B. Uniformity in the state and local tax bases.
C. Uniformity of major tax base definitions.
D. Central, electronic registration system for all member states.
E. Simplification of state and local tax rates.
F. Uniform sourcing rules for all taxable transactions.
G. Simplified administration of exemptions.
H. Simplified tax returns.
I. Simplification of tax remittances.
J. Protection of consumer privacy.

Where can I find a copy of the Agreement?
The Agreement and much other information about Streamlined can be found at www.streamlinedsalestax.org.

What is a member state?
A member state is one that has been determined by the Streamlined Sales Tax Governing Board to have changed their sales tax administration law so that they meet all of the requirements set forth in the Agreement. A seller that registers under the Agreement must collect sales and use tax for all member states. The member states are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, Rhode Island, South Dakota, Vermont and West Virginia. Sellers will be notified at the time a new state becomes a member state.

What is an Associate Member State & are sellers required to register with them?
An associate member state is one that has been determined by the Streamlined Sales Tax Governing Board to: (a) either be in compliance with the Agreement, except that changes to their statutes and rules are not all in effect at this time; or (b) in compliance with nearly all parts of the Agreement. In either case, the necessary changes must take effect on or before January 1, 2008.

A seller that is not otherwise required to collect sales or use tax in an associate member state may, but is not required to, register to collect sales or use tax for any of the associate member states. Sellers will be notified at the time a new state becomes an associate member state.

What does it mean to register under the Streamlined Sales & Use Tax Agreement?
This system is a quick and easy way for sellers to register and update sales and use tax information for all members and those selected associate states at one time and place.

The use of this system will register a seller in each of the member states and those associate member states chosen by the seller.

Once registered the seller must collect and remit sales and use taxes for all taxable sales into the member states, and those chosen associate member states. This requirement includes all the states that become member states after the seller's registration.

A seller that has a legal obligation to collect a states sales tax (and is not already registered in that state) may be required to complete additional registration forms for that state. This registration system has a web link, email or telephone number for each state for those sellers who do need to complete additional registration forms.

A seller already registered in a member or associate states may still use the registration system. Choosing ?already registered? on the registration form will inform those states that a seller is ?already registered.? States will not issue a duplicate registration, but will just add the Streamlined Sales Tax ID to the current registration.

Am I required to register for sales or use tax using this registration system?
No, only those sellers that want the benefits of the Streamlined Sales & Use Tax Agreement must register on this site.

What are the benefits of registering under the Agreement?

  • An amnesty, subject to limitations, for a limited time.
  • The ability to use certified sales tax administration software, the cost of which states may subsidize for certain sellers.
  • One identification number to be used to file and pay taxes for the registered states.
  • The ability to update registration data with all registered states at one time and place.
  • Sellers gain the ability to update registration data with all member and associate member states at one time and place.

What is a Technology Model?
The three technology models described below utilize some form of certified sales tax administration software. The certification is conducted by the states to determine the accuracy of the software. If a seller is using or proposes to use a technology model they will be using must select that model. A seller that is not using a certified system must select ?Other? on the registration.

Model 1 - Certified Service Provider (CSP)
An agent certified under the Agreement to perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases. A CSP is designed to allow a business to outsource most of its sales tax administration responsibilities. The software system of a CSP will identify which products and services are taxable, will apply the appropriate tax rate, will interface with your accounting system, and will file the tax return and remit the tax to the appropriate taxing authority. Each member and associate state has certified the accuracy of the software and will provide liability relief for errors that may result in the incorrect calculation of the tax amount (the CSP can provide additional information regarding their relief). In addition, these services will be paid for by the member and associate member states, at no cost to you, in states that you meet the definition of a volunteer seller.

Select if the seller is using a CSP as its agent.

Model 2 - Certified Automated System (CAS)
CAS is software certified under 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. A CAS is designed for a business that wants to utilize the tax calculation software that has been certified by the states while maintaining the responsibility for filing returns and remitting the tax. The software system of a CAS will identify which products and services are taxable, will apply the appropriate tax rate, and can interface with your accounting system. The business that uses a CAS remains responsible for filing the tax return and paying the tax. Each member and associate member state has certified the accuracy of the software and will provide liability relief for errors that may result in the incorrect calculation of the tax amount (the CAS provider can provide additional information regarding this relief).

Select if the seller is using a CAS to perform part of its sales and use tax functions, but retains responsibility for remitting the tax return.

Model 3 - Certified Proprietary System
A seller whose own proprietary automated sales tax system has been certified by the member states and has entered into a performance agreement with the member states. The Streamlined Sales Tax Governing Board has not yet established a performance agreement for the certification of proprietary systems.

Until further notice, a seller with their own proprietary system will need to register as ?other?.

Other - No Certified System
A seller that calculates its tax, prepares it tax return, and files and pays sales tax via a system other than a Model 1, Model 2 or Model 3.

Select this option if you are not using a CSP, a CAS nor have your own system that is certified by the member states.

Who are the Certified Service Providers?

A listing of all current Certified Service Providers (CSP) can be found at:

http://www.streamlinedsalestax.org/index.php?page=Certified-Service-Providers

Who provides a Certified Automated System?

Taxware
Taxware has provided sales, use and value added tax compliance solutions for over twenty-five years. We are a Certified Service Provider (CSP), and additionally offer a Certified Automated System (CAS). Taxware processed the first certified transactions in 2001 during the pilot run by the Streamlined Sales Tax Project. Taxware clients include businesses of all sizes and markets, and our products integrate with accounting and ERP systems including SAP and Oracle Financials. For more information contact Charles Collins (919-782-0628) or charles.collins@Taxware.com)

CCH
CCH is certified as both an SST Model 1 (CSP) and Model 2 (CAS) provider - combines the practical advantages of Web-based technology with CPA designed functionality, so sales tax compliance can be both cost-effectively automated, and expertly managed. Its "Core Four" strengths set CCH apart.

What is the definition of a volunteer seller?
The following is the definition of a Volunteer seller for purposes of Certified Service Provider (CSP) compensation that is in the Governing Board contract with the CSPs. The full contract can be found at www.streamlinedsalestax.org.

Volunteer Seller in a Member State or Associate Member State means a Seller that has registered pursuant to Article IV of the Streamlined Sales & Use Tax Agreement through the Central Registration System and:

(1) Represented in its registration that it did not have a legal requirement to register and in fact did not have a requirement to register in the Member State or Associate Member State at the time of registration, regardless of any previous registration the Seller may have made in the Member State or Associate Member State; or

(2) For Sellers who registered with the Member State or Associate Member State after November 12, 2002, the Seller meets all of the following criteria during the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State:

a. no fixed place of business for more than thirty (30) days in the Member State or Associate Member State;

b. less than $50,000 of Property, as defined below, in the Member State or Associate Member State ;

c. less than $50,000 of Payroll, as defined below, in the Member State or Associate Member State; and

d. less than twenty-five percent (25%) of its total Property or total Payroll, as defined below, in the Member State or Associate Member State.

Notwithstanding subsection (2) above, any Seller that registered in a Member State or Associate Member State after November 12, 2002 and prior to October 1, 2005, is not considered a Volunteer Seller for that Member State or Associate Member State, if the Seller had a legal requirement to register as a result of administrative, legislative, or judicial action in the state occurring prior to the date of the Seller?s registration.

For purposes of subsection (2) above, ?Property? and ?Payroll? are defined as follows:

(1) ?Property? is the Average Value of the Seller?s real property and tangible personal property owned or rented by the Seller. Property owned by the Seller is valued at its original cost basis. Property rented by the Seller is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the Seller less any annual rental rate received by the Seller from sub-rentals. The ?Average Value? of Property shall be determined by averaging the values at the beginning and end of the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State .

(2) ?Payroll? is the total amount paid by the Seller for Compensation during the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State . ?Compensation? means wages, salaries, commissions and any other form of remuneration paid to employees and defined as gross income under Internal Revenue Code ?61. Compensation is paid in a Member State or Associate Member State if (1) the individual?s service is performed entirely within the Member State or Associate Member State, (2) the individual?s service is performed both within and outside the Member State or Associate Member State, but the service performed outside the Member State or Associate Member State is incidental to the individual?s service within the Member State or Associate Member State, or (3) some of the service is performed in the Member State or Associate Member State and (a) the base of operations, or if there is no base of operations, the place from which the service is directed or controlled, is in the Member State or Associate Member State, or (b) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual?s residence is in the Member State or Associate Member State.

If my company does not meet the definition of a volunteer seller is amnesty still available?
Yes, amnesty is available for all sellers unless they meet the limitations.

What are the amnesty limitations?
Amnesty is available in all Streamline states. However, the amnesty expires in all the full member states on September 30, 2006 unless the seller uses a CSP or CAS. Member and associate member states will provide amnesty for uncollected or unpaid sales or use taxes to a seller who registers to pay or collect and remit applicable sales or use taxes on sales made to purchasers in the state. Amnesty is applicable only to sales or use taxes due from a seller in its capacity as a seller and not to sales or use taxes due from a seller in its capacity as a purchaser.

The amnesty precludes an assessment for uncollected or unpaid sales or use taxes together with interest or penalty for sales made during the period the seller was not registered in the state, provided registration occurs within 12 months of the effective date of the state's participation in the Agreement. The amnesty will be granted regardless of ?nexus? of the seller if all other requirements are met.

No amnesty is available for sales and use taxes already paid or remitted to a state or to taxes collected by a seller. No amnesty is available under the Agreement for taxes other than sales or use taxes.

A member state may allow amnesty on terms and conditions more favorable to a seller than is required by the Agreement.

To obtain amnesty, the seller, both those who have a legal obligation to collect in a state and those who don?t, must agree to register in all full member states of the Agreement if not currently registered. This includes registration in full member states joining the Agreement after the seller's registration. The seller may elect to register in associate member states.

The seller is not eligible for amnesty in a member state if the seller:

  • Was registered in the member state for the 12 month period preceding the effective date of the state's participation in the Agreement; or
  • Has received notice of an audit by the member state and the audit is not yet fully resolved, including any related administrative and judicial processes.

To obtain amnesty, the seller must use the Streamlined Sale Tax Registration System.

Is there a fee to register under the Agreement?
There are no fees or other charges for a seller to register in a state in which the seller has no legal requirement to register. There may be a fee assessed by some states if the seller has a legal requirement to register.

Will a seller be notified when a new member state joins?
Yes, all sellers registered under the Agreement will be notified, potentially by email, of their requirement to begin collecting sales and use tax in new member states. If the new state is an associate member the seller will be given the option of registering to collect tax for that state.

May I use the SST registration even if I have a legal obligation to register in a state?
Any seller that wants or needs to register in all the member states may use the registration system. A seller that has a legal obligation to register in a state will also need to contact those states for further sales tax licensing requirements. A web site for each member and associate state is provided by a link on the registration page.

If my company is already registered in some of the member states how will this affect my Streamlined registration?
There is a place on the registration form to list if you are ?already registered? in a state. In this case most states will not issue a duplicate registration, but will just add the Streamlined Sales Tax ID to the current registration.

What do I do if I registered mistakenly with Streamlined, or I no longer want to participate?
A seller may cancel their registration through the registration system. Go to www.sstregister.org/sellers and click on Update Registration. At this point you will need your SST ID and password to continue. Click on ?Change Registration Status? and follow the instructions to cancel your registration.

If a seller collected tax for member or associate states during the time they were registered, they are required to remit the tax to the state(s).

A seller should consult with the state or their attorney or accountant before they cancel their registration in any state where they have a legal obligation to register to determine the requirements for remaining registered with that state.

Any seller who received an amnesty from any Streamline state will lose that amnesty if they cancel their registration within 36 months of registration. They will also lose their amnesty if they cancel in any full member state during the 36 month collection requirement.

Any seller that wants to register after having canceled their registration must complete a new registration and receive a new SST ID.

I registered with Streamlined and am now registered in more states than I want. May I cancel in the states in which I do no business?
A seller must remain registered with all of the member states, or cancel with all of the member states. If a seller wants to register with only a few states they should not use the Streamline registration system.

Amnesty is not available in any state unless a seller is registered with all of the full member states.

My company went out of business. If I cancel will I lose my amnesty?
If a seller goes out of existence and has paid all of the taxes due, they will not lose the amnesty when they cancel their registration.

To cancel go to www.sstregister.org/sellers and click on Update Registration. At this point you will need your SST ID and password to continue. Click on ?Change Business Status? and follow the instructions to cancel. A seller will not be able to go back into the update function once they have checked the out of-business button.

What are the requirements for filing returns?
The CSP will file the tax returns for those sellers that use a CSP. For all other sellers, each state will provide information on how to file and pay taxes for that state.

There is only one sales tax return required for each state for each taxing period. A separate return may be required to report use tax due from a seller in its capacity as a buyer.

A seller that uses a CAS will have the ability to file a Simplified Electronic Return.

All other sellers (except those noted below) may use a Simplified Electronic Return at the state?s discretion. A seller may utilize each state?s existing returns or the Simplified Electronic Return.

In most states a seller that registered as an ?other? does not have to file a tax return more often than once a year unless the seller collects $1,000 in taxes. Once a seller collects a $1,000 in tax for a state the seller must file and pay that tax. At that point, a state may also require a return and payment more often than once a year.

A seller who was already registered in a state should continue to file as they have been, unless instructed differently by the state

How are payments handled?
The CSP will pay the tax for those sellers that use a CSP. For all other sellers, each state will provide information to sellers on how to pay taxes for that state.

States must accept ACH Debit, ACH Credit or same day alternative payment options if the seller is using the simplified electronic return. Sellers not using the simplified electronic return may choose an option currently available with each member state.

If the tax payment is due on bank holiday or a weekend, the payment is due the next business day.

Some sellers in some states may have to make more than one tax payment per month. The state will inform the seller of the process for those payments.

I do not remember my password. How to I find it?
There is a password recall on the registration system. Click on Update Registration and then the ?recall password? link. The password will be emailed to you.

Are sellers issued an SST ID number for each state?
Once the registration process is complete the seller will be given one unique Streamlined Sales Tax ID number to be used in all states. The SST ID is the seller?s registration number and is to be used for communication with the states or the Streamlined Administrator. It may, at the discretion of each state, be used when filing returns and paying sales or use tax.

The Streamlined ID number can be used universally on a resale certificate in all member and associate states.

Who can be contacted if sellers need help with technical problems?
If a seller is having technical problems with this application, contact the Administrator at support@sstregister.org

What is meant by FEIN/SSN?
An FEIN is a Federal Employer?s Identification Number. For further information or to apply for an FEIN, please go to www.irs.gov and request form SS-4.

An SSN is a social security number. If the business is a sole proprietorship, enter the SSN of the owner of the business.

I mistakenly used the wrong FEIN when I registered. How do I fix it?
A seller cannot change the FEIN or Social Security fields once they have registered. If a seller needs to fix an FEIN they should email the Administrator at support@sstregister.org with an explanation.

If a seller wants to change the ownership they must cancel the current registration and apply for a new SST ID.

What is entered in Legal Name?
Enter the legal name of the business. If the business is a sole proprietorship, enter the name of the person owning the business.

What is meant by State of Incorporation or Organization?
Enter the state where the business is incorporated or the state where the company is organized.

What will be mailed to the mailing address?
Welcome letters, registration packets, bills, refunds and other correspondence from each state will be mailed to the mailing address. If a seller chooses model 1 and wants this information mailed to the CSP they should enter the CSP?s mailing address in this field.

What is the SSTP Beginning Effective Date?
This is the date that the seller will begin collecting tax for each state in which they were not previously registered. The date cannot be more than 30 days in the future.

What if a seller registered and used the wrong effective date?
The company will not be ready to begin collecting in each state by the effective date that they submitted.
If a company is not ready to begin collecting tax by the beginning effective date the seller needs to cancel their registration and reapply when they are ready.

What is a NAICS code?
The North American Industry Classification System (NAICS) is a unique 6 digit system for classifying business establishments according to their primary industrial activity. Please choose the 6-digit code that most closely identifies the seller?s primary business activity. The following web link may be used to look up a NAICS code.
http://www.census.gov/epcd/www/naics.html

I got a confirmation number when I updated my information. Will I use that number if I need to update again?
A confirmation is provided each time a registration change is submitted. It should be retained as proof that registration data was submitted, but does not need to be provided for subsequent registration updates.

The company originally registered has been acquired and the contact person is no longer with the company. How do I change the contact information and email address?
If the seller knows the SST ID and password, they can go to www.sstregister.org/sellers and click on Update Registration. Select Update Business/Contact Info to make any changes to the contact information and email address.

If the seller does not know the password, the system has a password recall function. But the password is emailed to the contact person currently listed on the registration. If that person has left the company the seller needs to contact the Administrator at support@sstregister.org to update the email address for the new contact.

support@sstregister.org
Definition of volunteer seller for purposes of CSP compensation:

(b) Volunteer Seller in a Member State or Associate Member State means a Seller that has registered pursuant to Article IV of SSUTA through the Central Registration System and:

(1) Represented in its registration that it did not have a legal requirement to register and in fact did not have a requirement to register in the Member State or Associate Member State at the time of registration, regardless of any previous registration the Seller may have made in the Member State or Associate Member State; or

(2) For Sellers who registered with the Member State or Associate Member State after November 12, 2002, the Seller meets all of the following criteria during the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State:

a. no fixed place of business for more than thirty (30) days in the Member State or Associate Member State;

b. less than $50,000 of Property, as defined below, in the Member State or Associate Member State;

c. less than $50,000 of Payroll, as defined below, in the Member State or Associate Member State; and

d. less than twenty-five percent (25%) of its total Property or total Payroll, as defined below, in the Member State or Associate Member State.

Notwithstanding subsection (b)(2) above, any Seller that registered in a Member State or Associate Member State after November 12, 2002 and prior to October 1, 2005, is not considered a Volunteer Seller for that Member State or Associate Member State, if the Seller had a legal requirement to register as a result of administrative, legislative, or judicial action in the state occurring prior to the date of the Seller?s registration.

(c) For purposes of subsection (b)(2), ?Property? and ?Payroll? are defined as follows:

(1) ?Property? is the Average Value of the Seller?s real property and tangible personal property owned or rented by the Seller. Property owned by the Seller is valued at its original cost basis. Property rented by the Seller is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the Seller less any annual rental rate received by the Seller from sub rentals. The ?Average Value? of Property shall be determined by averaging the values at the beginning and end of the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State.

(2) ?Payroll? is the total amount paid by the Seller for Compensation during the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State. ?Compensation? means wages, salaries, commissions and any other form of remuneration paid to employees and defined as gross income under Internal Revenue Code ?61. Compensation is paid in a Member State or Associate Member State if (1) the individual?s service is performed entirely within the Member State or Associate Member State, (2) the individual?s service is performed both within and outside the Member State or Associate Member State, but the service performed outside the Member State or Associate Member State is incidental to the individual?s service within the Member State or Associate Member State, or (3) some of the service is performed in the Member State or Associate Member State and (a) the base of operations, or if there is no base of operations, the place from which the service is directed or controlled, is in the Member State or Associate Member State, or (b) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual?s residence is in the Member State or Associate Member State.

D.3. Losing Volunteer Seller Status. A Volunteer Seller shall lose its status as a Volunteer Seller in a Member State or Associate Member State if:

(a) as a result of activities the Seller conducts in a Member State or Associate Member State after the date of the Seller?s registration in the Member State or Associate Member State, the Seller becomes legally obligated to register in that Member State or Associate Member State; and

(b) as a result of activities the Seller conducts in a Member State or Associate Member State after the date of the Seller?s registration in the Member State or Associate Member State, the Seller fails to meet one or more of the criteria under subsection D.2 (b)(2) above in that Member State or Associate Member State. For purposes of determining whether the Seller meets the criteria, the ?Average Value? of Property shall be determined by averaging the values at the beginning and end of the last fiscal year of the Seller that terminates at least thirty (30) days before the date the determination is made; and Payroll shall be the total amount paid by the Seller for Compensation during the last fiscal year of the Seller that terminates at least thirty (30) days before the date the determination is made.

The Streamlined Sales and Use Tax Agreement makes a distinction between a seller that "has no legal requirement to register" in a state and those that do. Specifically, if a seller does not have a legal requirement to register, the seller cannot be charged a registration fee by the state (Section 303 (B)), they can file their returns less frequently under certain circumstances (Section 318 (D)), and they can complete their registration using this online registration process and not be required to provide the state with any additional information (Section 401 (C)).

An individual state may challenge a seller?s representation that they do not have a legal requirement to register in that state. States are encouraged to accept the seller?s representation unless the state can demonstrate that the seller could not have had, under the laws that were in existence at the time of registration, a good faith understanding that they had no legal requirement to register.

A seller?s legal obligation to register in a state does not impact the amnesty that is available to the seller. A seller is still eligible for amnesty in all of the member states and associate member states regardless of their answer to this question on the registration system.