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Streamlined Sales Tax

What you need to know Q&A

Avalara

Streamlined Sales Tax*, or SST, is an effort by states, local governments and the business community to simplify and reduce the burden of sales and use tax collection, administration, and compliance. This Q&A highlights the implications of SST for businesses selling in the U.S.

1. What is Streamlined Sales Tax (SST)?

Answer: SST simplifies sales and use tax administration for all sellers and all types of commerce by making sales tax administration requirements less burdensome. Participating states must simplify and centralize aspects of sales tax administration such as rates, rules, registration, remittance, consumer privacy protection, and exemption certificates. For some companies, SST offers critical tools to help address ever-changing sales tax regulations. For others, the benefits of SST are less obvious.

PROS: If a business is rapidly expanding or already doing business in SST member states, registering with SST is cost-effective and efficient. By registering, a company uses one form for 23 states. Additionally, registered businesses have access to electronic filing, reduced filing fees and, if qualified, access to certified tax decision software. For a business expanding its physical presence, SST offers a. single form filing, b. protection, and c. free filing.

CONS: It is less cost-effective for a company with no physical presence in an SST state to register and participate in the SST program.

2. Do all 50 states participate in SST?

Answer: No. Currently 23 full member and TN associate member state adhere to the Streamlined Sales and Use Tax Agreement. Whether a state is a full or associate member relates to the extent to which they follow the streamlining guidelines.

state map 2014_1_1

The 23 full member states are 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.

The associate member state is Tennessee.

3. What are the benefits of registering with SST? What happens if my company does not register?

Answer: As stated above, companies that already have nexus in SST states or are expanding into SST states will save significant time and money by registering with SST. Registration is probably overkill for companies that do not currently, and do not plan to, do business in SST states. Not registering won’t cause any trouble.

For those that do register, further access includes:

Certified sales tax administration software.
Single identification number to file and pay taxes in registered states.
Register or update registration data in one place.
Uniform filing forms and exemption certificates.
Boundary and rules data.
Centralized source of updates and information regarding sales tax rules and regulations.

Registering in all SST states is free and easy and requires only one form. If you qualify and take 10 minutes to fill out the online form, filing is also free in SST states.

4. How would the Marketplace Fairness Act (MFA) impact SST?

Answer: The Marketplace Fairness Act, or MFA, is a federal effort to allow states to expand remote seller sales tax requirements. If passed, companies already collecting under SST will be better prepared to meet the expanded collection requirements. SST is an excellent way to build more sales tax compliance into business processes and implement a sales tax infrastructure that will make the transition to a post-MFA world easier. Businesses that want to get ahead of the curve in case the Marketplace Fairness Act of 2013 (MFA) passes will benefit from registering early.

6. Why should I use one of the SST certified technology solutions?

Answer: As a certified SST provider, data processing and management of sales tax information meets the rigorous standards set forth by SST.

By utilizing the SST certified technology solution provided by Avalara, your company will have protection, automation, and reduced costs. In some cases, states even help pay for the software. Our certified software products are quick and easy to use and better prepare your company for upcoming state and local sales tax regulatory changes.

*This project is funded under an agreement with the Streamlined Sales Tax Governing Board, Inc.

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