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Streamlined Sales and Use Tax

Advantages & Considerations

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  1. Subsidized start up costs. Monetary allowances for new technological models for sales tax collection may be available. You should contact SST directly to determine if your SST start-up costs (or portion thereof) can be subsidized.
  2. Centralized electronic registration. Electronic registration may be completed for all member states simultaneously from the SSTGB web-site. There is no need to register for each state individually. If you are already registered as a non-SST taxpayer in an SST state, that registration may be converted to your uniform SST registration.
  3. Uniform sourcing rules. The same sourcing rules apply for all SST Member States. (This is only true for the full members.)
  4. Safe harbor for tax calculation errors. Taxpayer protection is available if taxability status or tax calculation errors occur due to inaccurate or outdated resource material published by SST. All SST States use standardized Rate and Boundary Tables in conjunction with published Taxability Matrices to determine the appropriate sales tax treatment. Detailed information can be found on the SSTGB web-site.
  5. Audit Relief. In most cases, when you use a Certified Service Provider (CSP) like CCH, the CSP is audited instead of the taxpayer.
  6. Simplified state and local tax rates. There are a maximum of two taxes administered on the state level; one general tax and an optional food/drug tax. On the local level, only one combination of county, local, and special jurisdiction tax is applicable.

    For example, clothing and custom computer software purchased from Charlotte, North Carolina in April 2009 would be taxable at the same state, local and special jurisdiction rate. The state rate would be 4.50%, the county rate would be 2.25% and the special taxing jurisdiction rate would be 0.50% - for a combined rate of 7.25%. You would not have to determine separate rates for clothing and custom computer software sourced to the same location. The only exception being if food ingredients were purchased, as North Carolina is an SST state that has an alternate state rate for certain food products. In this case the state rate would be 2.00% instead of 4.50% and the local and special jurisdiction rates would remain unchanged.
  7. Consistent product definitions. With SST, items are consistently defined in all member states. As an example, ski boots are consistently defined as Sport or Recreational Equipment for all member states. Without SST, this item could be defined as Clothing in Arkansas, Clothing Accessories and Equipment in Rhode Island, Protective Equipment in New Jersey, and Sport or Recreational Equipment in Nevada.
  8. Uniform electronic filing. Tax returns may be submitted and taxes may be remitted electronically in a consistent format via data upload. For example, you would use the same format for submitting returns in Oklahoma, North Carolina, and Arkansas. Paper returns will no longer be required and all payments may be remitted via Electronic Funds Transfer (EFT) as part of the electronic return.
  9. Limited Amnesty. Limited amnesty is available through SST to new registered sellers in a participating state for uncollected or unpaid sales (or use) taxes, together with interest or penalties for sales made during the period the seller was not registered in the state. This amnesty is limited to those sellers that register within 12 months of the effective date of the state's participation as a full member state. The amnesty will be granted regardless of "nexus" of the seller if certain requirements are met. Detailed information can be obtained from the SST Governing Board.

Streamlined Sales Tax (SST) - Additional Considerations

  1. Businesses still have to comply with nexus rules in non-SST states. Taxpayers must deal with nexus and filing issues, especially in states like Alabama and Louisiana where there are dozens of locally administered jurisdictions.
  2. Amnesty is subject to a number of conditions and may not be available if you already have nexus, are under audit or have received notice of audit in an SST jurisdiction. In addition, amnesty provisions for most SST states have already expired or will expire soon as they are limited to the twelve month period following the date of full membership for each state.
  3. Registration Requirements. If a business registers for SST and does not already have nexus in all SST full member states, a business must register and report in those states, potentially increasing the number of states that require compliance maintenance.
  4. Not all states comply, which means businesses must follow different rules for conforming and non-conforming states. In the associate member states, all laws may not have been changed to conform with SST. In addition, businesses should not assume the same uniform product definitions and sourcing rules apply to Non-SST states.

Note: This document incorporates research based on source and reference materials published by the Streamlined Sales Tax Governing Board, Inc. promoting a streamlined sales tax system for the 21st Century.

BTW - don't forget to check these other Streamlined Sales Tax (SST) resource pages on SalesTaxSupport.com:

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