All about Streamlined Sales Tax

What is Streamlined Sales Tax (SST)?

Streamlined Sales Tax is an organization of 24 state governments, taxpayers, and technology providers who have banded together with the mission to make sales tax compliance more simple. The participating state governments drafted the “Streamlined Sales and Use Tax Agreement” which sets out the required uniformity and simplicity states must adopt to become a member and maintain their membership. Some examples include uniform definitions, standardized sourcing, and simplified filing.

The Agreement also discusses the important role technology providers can play in tax simplification.  Through this program, CSP-compensated sellers, once called volunteer sellers, have the ability to use one of the Certified Service Providers in a way that is both cost-efficient and provides significant audit protection.  

Which states are participating in the Streamlined Sales and Use Tax Agreement (SSUTA)?

There are 24 participating states:

  • Arkansas

  • Georgia

  • Indiana

  • Iowa

  • Kansas

  • Kentucky

  • Michigan

  • Minnesota

  • Nebraska

  • Nevada

  • New Jersey

  • North Carolina

  • North Dakota

  • Ohio

  • Oklahoma

  • Rhode Island

  • South Dakota

  • Tennessee

  • Utah

  • Vermont

  • Washington

  • West Virginia

  • Wisconsin

  • Wyoming

Both Pennsylvania and Illinois have CSP programs that are separate from Streamlined Sales Tax.

 

What is a Certified Service Provider (CSP)?

A Certified Service Provider, or CSP, is a tax compliance technology provider certified under the SSUTA to calculate, file, and pay taxes on the seller's behalf that qualifies as a CSP-compensated seller in the SSUTA member states. The CSP provides its services free of charge to the seller and is compensated by the states where they file and remit taxes on their clients’ behalf. The services a CSP provides are the following:

  1. Integrate the CSP’s software with the seller’s systems

  2. Calculate tax on all relevant sales transactions by applying the correct rate and product taxability rule

  3. Maintain a proper record of each transaction

  4. Prepare and file the required tax returns

  5. Remit the tax to each of the SSUTA member states

  6. Resolve any notices or audits by any SSUTA member states

  7. Protect the privacy of the tax information it obtains

 

What is a CSP-compensated seller?

A CSP-compensated seller is a taxpayer that qualifies for using a CSP to calculate and remit sales and use tax on their behalf in any of the SSUTA member states. A CSP-compensated seller:

  • can’t have a fixed place of business in the state

  • can’t have more than $50,000 of inventory or payroll in the state

A seller with a physical nexus or considerable people or property in the state is not qualified to be a CSP-compensated seller.

It’s important to remember that a company determines its eligibility on a state-by-state basis, meaning a place of business or significant inventory in one SST member state would not disqualify you from eligibility in any of the others.

A full assessment of eligibility for CSP-compensated seller status is available at this link.

 

What are the benefits of using a CSP?

One of the main advantages mentioned before is cost savings. However, using a CSP is not just about cost. Under the SST requirements, CSPs essentially become the taxpayer of record for any transaction in a member state. That means that when it’s time for an audit, the CSP is the primary point of contact and they take on audit liability for any inaccuracies that they have caused. For a tax department with a lot already on their plate, this can be an enormous time-saving feature and time is almost as valuable as money.

 

Registration for CSP-compensated sellers in SSUTA states

  1. Have you already registered as a CSP-compensated seller in SSUTA states before you started using Sovos? You can continue to file on your own if that’s what you prefer. You can also decide to leverage Sovos as your Certified Service Provider(CSP), in which case we would signal through the SST Registration System (SSTRS) that Sovos will be filing and remitting on your behalf as your CSP.

  2. You’re a Sovos customer and want to register now with Sovos as your CSP? If you qualify as a CSP-compensated seller after becoming a Sovos customer, Sovos can complete the registration for you and get registered as your CSP all at the same time.

  3. You’re registered with another CSP and are moving to Sovos? Your former CSP will need to submit a CSP End Services registration change through the SSTRS. Once that’s complete, Sovos can submit the CSP services change to Sovos.

  4. Not registered but want to, and not planning to use a CSP? Register in the Streamlined Sales Tax Registration System (SSTRS).