Streamlined Sales Tax Best Practices: Vermont and Vouchers
- May 14, 2014 | Gail Cole
There are more than 10,000 sales and use tax rates in the United States. To help facilitate filing for businesses that sell into multiple jurisdictions, the Streamlined Sales and Use Tax Agreement was created. Its goal is to simplify and modernize sales and use tax administration in order to reduce the burden of tax compliance for businesses. There are currently 23* Streamlined Sales Tax (SST) states in compliance with the Streamlined Sales and Use Tax Agreement and one associate member (Tennessee).
Periodically, SST states alter their practices to comply with the Streamlined Sales and Use Tax Agreement. Recently, the SST Governing Board approved Vermont’s best practices matrix related to the treatment of vouchers. Vermont now follows the following best practices:
- It “administers the difference between the value of a voucher allowed by the seller and the amount the purchaser paid for the voucher as a discount that is not included in the sales price, … provided the seller is not reimbursed by a third party, in money or otherwise, for some or all of that difference.”
- It “provides that when the discount on a voucher will be fully reimbursed by a third party the seller is to use the face value of the voucher… and not the price paid by the purchaser as the measure (sales price) that is subject to tax.”
- It “provides that costs and expenses of the seller are not deductible from the sales price and are included in the measure (sales price) that is subject to tax. Further, reductions in the amount of consideration received by the seller from the third party that issued, marketed, or distributed the vouchers, such as advertising or marketing expenses, are costs or expenses of the seller.”
Sellers doing business in multiple SST states are encouraged to register with SST. Registration requires businesses to collect and remit sales and use taxes for all SST states and provides sellers with “a quick and easy way … to register and update sales and use tax information for all members and those selected associate states at one time and place.”
* The 23 SST 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, and Wyoming.