A test of streamlined online sales tax gets underway
The first online merchant using sales tax calculation and remittance software for sales transactions as part of the Streamlined Sales Tax Project has gone live on the web.
O.C. Tanner Recognition Co., a provider of employee recognition products, is using the technology system developed by Taxware International Inc., a division of govONE Solutions, and Hewlett-Packard Co. to calculate sales and use taxes for both Internet and traditional transactions, then remit funds and filings to the proper tax authorities.
Online sales tax collection has been a contentious issue in the retailing world, with some retailers advocating the collection of sales taxes for all online retail sales and others arguing that only retailers who have a presence in the buyer’s state should collect sales taxes.
The Streamlined Sales Tax Project is an effort by 39 states to come to some simplified sales tax agreement that is fair to retailers and to the states and localities that rely on sales tax for operating revenue.
There are more than 7,000 different sales and use tax jurisdictions in the U.S.
The purpose of the SSTP pilot program is to test the use of a certified service provider to perform the sales tax administration functions of a merchant. The department of revenue for North Carolina issued the request for proposals for the pilot program and awarded the contracts. Kansas, Michigan, and Wisconsin will also participate as pilot states. If the program is successful, merchants will be tax compliant using state-certified software.
Taxware is the first certified service provider, meaning that these states have
certified that Taxware`s system calculates the taxes properly. As a result,
the states will assume the calculations on O.C. Tanner`s tax returns are
correct. The SSTP says this is the first time that any taxing authorities have certified transaction tax calculation software.
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