Streamlined Sales Tax

The majority of states with sales tax and the businesses who sell into most of these states developed an agreement to simplify sales tax administration for states and to reduce the burden of tax compliance for businesses. The Agreement primarily focuses on businesses with limited or no connection that sell to the states’ citizens through mail order, catalogs and the Internet.

States must apply for membership to the Streamlined Sales Tax Project. Vermont became a member as of January 1, 2007.

Through the Streamlined Sales Tax agreement, businesses get:

• A uniform definition of taxable items. Items subject to sales tax will be the same in all states at both the state and local option level

• A central, electronic registration system for all member states

• One account number for use in all states

• Simplified tax returns and reporting

• Simplified tax remittances options

• Ability to protect their customers’ privacy

Through the Streamlined Sales Tax agreement, the states get:

• Revenue that would otherwise be lost to the state

• Businesses collecting the sales tax for the state where the sales are to be delivered even if the business has limited or no physical connection with that state

Relief from Liability Provisions
In conformance with the liability provisions in the Streamlined Sales Tax Agreement:

• Vermont provides at least 30 days notice prior to the enactment of a tax rate change or provides relief from liability to sellers as stipulated in Section 304 of the Agreement.

• Vermont relieves sellers of liability in cases where the purchaser improperly claimed an exemption, as provided in Section 317 of the Agreement (see Reg. § 1.9745-1(B)).

• Vermont relieves purchasers from liability for penalty under the circumstances provided in Section 331 of the Agreement.

• Vermont relieves CSPs and model 2 sellers relying on the certification of software from liability, as provided in Section 502 of the Agreement.

Notice to Sellers for failure to File Timely Return

In conformance with Sec. 318, a seller registered under the Streamlined Sales and Use Tax Agreement who has no legal requirement to register in Vermont and who has failed to file a tax return will have a minimum of 30 days to file thereafter before the Vermont Department of Taxes establishes a liability amount for taxes based solely on the seller’s failure to timely file.

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