Sales tax board certifies three software vendors for tax collection
The Streamlined Sales Tax Governing Board, which oversees a 19-state program of collecting cross-border sales tax on Internet purchases, has certified three providers of sales tax collection software available to retailers.
The three software providers are Avalara, Bainbridge Island, WA; Taxware, Wakefield, MA; and Wynnewood, PA-based Exactor Inc.
The SST Governing Board has approved each of these companies as a Certified Service Provider and expects to sign contracts with them by June 1, says Diane Hardt, a Wisconsin tax administrator who co-chairs the Governing Board. Each vendor’s offerings are designed to let online and catalog retailers to outsource their sales tax collection through an ASP model, under which the vendors handle multiple elements of tax compliance, such as determining tax rates for each purchase, tracking the full cycle of transactions to account for such things as credits or returns, and transferring tax proceeds to multiple tax agencies.
These sales tax compliance, collection and remittance services are being offered for free to merchants who volunteer to collect and remit cross-border sales tax but are not required to by current law. Other incentives for such merchants may include exemption from audits and protection from liability for mistakes in tax calculation.
The SST has considered software services of about 12 vendors, but none is expected to become certified for another two years, Hardt says. Many of these companies say they still expect to eventually become certified as the demand for sales tax collection software increases among merchants.
For now, Internet and catalog merchants are not required to deal with sales tax for buyers from states where the merchants have no physical presence, or nexus. But the long-range goal of the SST, which has been streamlining sales tax laws in participating states to make tax collection easier for merchants, is to get enough participation among retailers to win support for a federal law that would mandate sales tax collection regardless of the nexus issue.
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