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Sales & Use Tax Tip for April 2007
Rare Break By States Ending Soon. Whether due to growth, sales force expansion, or the ever increasing popularity of Internet sales and purchasing, many companies have extended their reach into additional states. This, coupled with
Nexus-triggering activities, could create a requirement to register and collect Sales Tax for various additional states. Left unaddressed, the risk and exposure, including interest and penalties,
will continue to grow.
To state revenue departments, this economic explosion means uncollected revenues and more audit candidates.
As a mutual benefit to all concerned, states joined together in October 2005 and launched the Streamlined Sales Tax (SST) Agreement to provide tax uniformity and to offer a one-year amnesty period to companies that register and
comply.
Many states extended the amnesty, but that window is quickly closing! The deadline was extended only until May 31, 2007 in the following states: Indiana, Iowa, Kansas, Kentucky, Minnesota, New Jersey, North Dakota, Oklahoma, South
Dakota, and West Virginia. Nebraska has extended amnesty until July 31, 2007; Michigan and North Carolina did not extend. Rhode Island and Vermont became full members in January 2007 and will offer amnesty until Dec. 31, 2007.
If your Sales and Use Tax exposure is high in any of the SST states, it may make sense to evaluate this alternative before time runs out. The most significant benefit may be complete relief from all accrued and uncollected Sales
and Use Tax liabilities in one or more member states. However, there are draw backs. A careful evaluation of your company's situation is essential to see if SST registration is the right Exposure
Resolution option for you.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
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