This explains how to work with Avalara as your Certified Service Provider if your company has joined the Streamlined Sales and Use Tax program (SST). See SST - frequently asked questions for more information about the Streamlined Sales and Use Tax Agreement. If you're not already in the program, see how to apply for SST.
If the volunteer seller is in the state:
- Free Monthly Returns for SST Volunteer Sellers (determined per state)
- Free Registration in all selected SST states
- Free Transactions for SST Volunteer Sellers (determined per state)
- One registration and identification for all registered SST states
- Certified rates and boundaries
- Certified taxability matrix
- Automatic calculation of vendor discount
- Audit liaison in SST Volunteer States
Determining Volunteer Status
Sellers are considered to be a Volunteer Seller (vs Non-Volunteer) in the state if the following is true for the prior 12 month period:
- No fixed place of business for more than 30 Days.
- Less than $50,000 of property in the state.
- Less than $50,000 of payroll in the state.
- Less than 25% of total property or payroll in state.
SST Avatax System Requirements
To provide the most accurate sales tax calculations, SST companies must comply with the following requirements in the registered SST states:
• Complete exemption certificate information must be supplied using either the AvaTax ECMS module or Avalara CertCapture prior to an exempt transaction being processed in AvaTax. Exemptions cannot be passed on the invoice level. If exemption certificate information is not in ECMS or CertCapture the transaction will calculate tax.
• Items must be mapped to an SST certified Tax Matrix Code. The use of a non-SST tax code will result in a taxable transaction.
• Item Descriptions must be passed at the transactional detail level. If the item description field is left blank, the transaction will calculate tax.
• Custom Rules to reduce or exempt tax cannot be created in states that your company holds an SST Status of Volunteer
• Tax Overrides are not permitted on any transaction in the SST states. An error message will be received and the transaction will not post to Avatax if a tax override on a transaction is performed.
• All imported transactions must be recalculated (Process Code 3) prior to being included on the monthly return.
SST Go Live Requirements
- The Go Live process must be completed by the 20th of the month prior to the desired SST registration month. Ample time should be considered to allow for an advantageous Go Live process.
- Avalara will register your company in all selected SST States prior to the 1st of the month of the stated SST registration date.
- Avalara will set up the SST filing calendars on your behalf and will be visible in Avatax by the 1st of the month of the stated SST registration date.
Sellers previously registered with the SST program are required to still go through the Avalara SST Go Live process.
Filing with SST
SST Filing Requirements
- Must collect and remit in all SST states where your business is registered.
- Must file SST Simplified Electronic Return (SER) in registered SST states.
- Must file SST SER Monthly (Monthly Filing Frequency).
Funding Power of Attorney (POA)
As an SST customer, your tax liabilities are funded through an electronic withdrawal (ACH Debit) from your bank account. This withdrawal is initiated by Avalara as per your power of attorney (POA) authorization. Steps for setting up your POA authorization, funding timelines for tax liabilities, and other policies are covered in detail in fund your tax liabilities.
SST Filing Timelines
Important dates and deadlines related to filing your SST returns.
Monthly Process Steps
- 1st — 5th: The Liability Worksheet is automatically generated for the previous month, summarizing all committed transactions for each state or province and displaying return level liabilities for each jurisdiction. The top row for each state summarizes your total sales, your exempt transactions, your taxable sales, and your tax liability for that state. Expanding a particular state’s row displays information about each jurisdictional return on your filing calendar for that state.
- 5th — 10th: Reconciliation and approval: Compare and reconcile the Liability Worksheet with your accounting application’s sales/sales tax reporting. The Liability Worksheet is locked on the evening of the 10th, after which financial amounts are no longer available for adjustment.
- 11th — 14th: The tax liabilities are funded based on the billing option selected on the Power of Attorney form.
- 10th — 20th: SST returns processing occurs during these days. Avalara prepares, submits, and forwards the returns and then remits the funds to the applicable states.
- 20th: All SST returns are due
- General. These Streamlined Sales Tax Terms and Conditions (“SST Terms”) apply if you have registered under the Streamlined Sales Tax Initiative (“SST Initiative”), and you have selected Avalara as your Certified Service Provider (as that term is defined in the Streamlined Sales Tax and Use Agreement located at this site (the “SSUTA”)). These SST Terms are in addition to, and incorporate by reference, the Avalara Terms and Conditions available at http://www.avalara.com/terms (the “Terms”) as well as any additional terms you have agreed to for your use of AvaTax or Returns products. Any capitalized terms used herein and not defined will have the meaning given to such terms in Avalara’s contract with the SST Governing Board or the SSUTA, as applicable.
- DISCLOSURE STATEMENT. AVALARA HAS ENTERED INTO A CONTRACT WITH THE GOVERNING BOARD (THE “CONTRACT”) ESTABLISHED UNDER THE SSUTA (“GOVERNING BOARD”). AS A PREREQUISITE TO ENTERING INTO THE CONTRACT, AVALARA HAS CREATED A TAX CALCULATION SYSTEM SATISFACTORY TO AND CERTIFIED BY THE GOVERNING BOARD. IN ADDITION, AVALARA HAS ASSUMED CERTAIN OTHER RESPONSIBILITIES AND OBLIGATIONS AS SET FORTH IN THE CONTRACT, THE SSUTA, AND THE LAWS OF THE STATES THAT ARE MEMBERS OF THE SSUTA (“MEMBER STATES”). AS PROVIDED IN THE CONTRACT, AVALARA IS AUTHORIZED TO REPRESENT ITSELF AS A “CERTIFIED SERVICE PROVIDER” AND SERVE AS AN AGENT FOR SELLERS WHO DESIRE TO REGISTER AND PARTICIPATE IN THE SSUTA. IN ADDITION, THE SERVICES PROVIDED UNDER THESE SST TERMS BY AVALARA MAY BE PAID BY THE STATES THAT ARE MEMBERS OF THE GOVERNING BOARD. NOTHING IN THE CONTRACT OR THE SSUTA ESTABLISHES ANY RIGHT OR ENTITLEMENT IN SELLERS CONTRACTING WITH AVALARA. A SELLER’S RIGHTS AND ENTITLEMENTS WITH RESPECT TO AVALARA ARE ESTABLISHED AND GOVERNED BY THESE SST TERMS. A SELLER’S RIGHTS AND OBLIGATIONS WITH RESPECT TO ANY OF THE MEMBER STATES ARE DETERMINED BY THE LAWS OF EACH MEMBER STATES.
- Appointment of Avalara. You hereby confirm that you have registered to participate in the SST Initiative and appointed Avalara to act as your Certified Service Provider. If you have not already registered for the SST Initiative, you hereby agree that Avalara may act as your agent to register you to participate in the SST Initiative and thereafter to act as your Certified Service Provider.
- Seller Status/Records. You will provide Avalara with a statement of your Seller status in each Member State and each Associate Member State. In addition, each year you agree to provide your updated status within thirty days of Avalara’s request for the same. Your failure to respond to any such request may result in an unfavorable change to your status in a Member State or Associate Member State. You understand and agree that you are obligated to provide electronic records upon any request from the Governing Board and any Member State or Associate Member State.
- Treasury. Unless another funding process has been implemented by mutual agreement, you agree to execute a limited power of attorney in favor of Avalara and provide designated bank account information (“Bank Account”) for the purpose of paying your Taxes Due and remit your SER. You agree to fully fund the Bank Account. Avalara will automatically withdraw Taxes Due from the Bank Account at the same frequency that Avalara is required to transmit your Taxes Due to the Member States. In addition, if any Member State that requires the prepayment of Taxes Due, and you have not made those prepayments, Avalara will withdraw the entire amount of the required prepayment five calendar days prior to the date on which prepayment is due to any such state. If balance is found to be owing in order to fully fund your Taxes Due, Avalara will immediately collect the funds by withdrawing the balance owed, unless another payment method is agreed. Avalara will hold any Taxes Due withdrawn from the Bank Account in a trust account prior to disbursement to the Member State. Avalara acknowledges and agrees that all Taxes Due collected or received from you belong to, and will be held in trust for the benefit of the Member States to which such funds are due. Avalara will not any of your Taxes Due with Avalara’s general funds but those Taxes Due may be deposited with funds also held in trust on behalf of other you of Avalara.
- No Funding Obligation by Avalara. Avalara will not advance or provide funds to pay your Taxes Due. If for any reason the funds are not available in the Bank Account when they are due, Avalara will remit your SER without payment. You will then have 10 days from the payment due date to make the funds available to Avalara in the manner specified by Avalara. If the funds are not available to Avalara by the end of this 10 day period, Avalara will notify the Governing Board about lack of funding and terminate these SST Terms. You acknowledge and agree that Avalara will not be responsible for any assessments (including, but not limited to, all penalties and interest), if any, due as a result of remitting returns without payment.
- Indemnification Obligations. You agree to defend, indemnify and hold harmless Avalara and its Affiliates, subsidiaries, officers, directors and employees for any losses incurred by any of them as a result of: (a) your failure to timely remit all taxes, interest or penalties when due; (b) your failure to properly classify any item or transaction in accordance with a Avalara’s good and services codes that are certified by the SST Member and Associate Member States; (c) your failure to remit corrected Taxes Due after notice from a Member State or Avalara that the Taxes Due remitted by you were incorrect; (d) your failure to timely provide adequate documentation of exempt transactions; and (e) your failure to pass the invoice level information necessary to make a proper tax determination. You waive any claim against Avalara and its Affiliates, subsidiaries, officers, directors and employees relating to the foregoing. In addition, if it is found that you are not compliant with any of the requirements of the SSUTA in any way (including, but not limited to, the events described in the foregoing subsections (a) through (e)), then you agree to: (i) use your best efforts to immediately cure such non-compliance; and (ii) you and your officers and employees will use best efforts to cooperate with Avalara to cure such non-compliance.
- Non-Volunteers. For each SER Avalara remits on your behalf in Member States where you have conceded sales tax nexus and registered as a non-volunteer taxpayer, Avalara will charge you the lower of: (a) its standard per-remittance fee; or (b) the per-form rate you are charged for Returns services under your Returns plan level. In addition, if you have registered as a non-volunteer, you understand and agree that Avalara will not provide transactional data to any Member State, and that a Member State may audit your data directly to ensure compliance with its laws and the Contract.
- Non-Taxable Transactions. As permitted in the SSUTA, Avalara reserves the right to charge you an additional fee if your non-taxable transactions in a Member State exceed 50% of your total transactions in that state during any calendar year.
- Survival. Sections 3-9 in these SST Terms will survive any expiration, non-renewal, suspension or termination of these SST Terms.
SST state-specific regulations
Washington B&O law
- What is the business and occupation (B&O) tax?
The Washington State B&O tax is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business. Washington, unlike many other states, does not have an income tax. Washington’s B&O tax is calculated on the gross income from activities. This means there are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business.
- What is the B&O tax rate?
The B&O tax rate varies by classification. Once you know which classification your business fits into, you can find the rate that corresponds to your classification on the WA list of B&O tax rates.
- If I am a Streamlined Sales Tax Volunteer Seller, am I required to pay B&O Tax?
It depends. When you register as an SST volunteer, you're merely telling the state that you do not have a fixed place of business, you have less than $50,000 worth of property, or that you have less than $50,000 in payroll; it doesn't indicate that you are required or not required to file.
For example, your organization may have independent sales representatives or independent service technician, or your organization may participate in trade shows in Washington. Even though these activities may cause the business to be required to collect and remit taxes in Washington, a business is still considered an SST status volunteer until that business meets the Washington SST requirements.
- If I am a Streamlined Sales Tax Non-Volunteer Seller, am I required to pay B&O Tax?
Yes. A business with non-volunteer SST status either has a fixed place of business in a state, more than $50,000 worth of property, or more than $50,000 in payroll. Any one of those three activities would trigger nexus for a business in the state of Washington.
- Will the B&O tax be filed on my SST Simplified Electronic Return (SER)?
No, the B&O is a tax on gross receipts. The SER only reports on sales and use tax.
- How do I pay the B&O tax?
The B&O tax is reported and paid on the excise tax return or by electronic filing to Washington state. This needs to be paid by the 20th of each month to match to the electronic Streamlined Sales Tax Simplified Electronic Return, which is filed monthly.
- Can Avalara file the B&O tax on my behalf?
Yes. You can engage Avalara to file and remit the B&O Tax Return monthly for a filing fee.
- Where can I find out more information on the B&O tax?
In order to properly set up your B&O return, Avalara needs your login ID and password to Washington's Department of Revenue (DOR) website.
- If you have a login and a password for Washington state's DOR website, please add them to the SST application.
- If you don't recall your login and password, retrieve your login ID or retrieve your password.
- If you're not registered to file Washington B&O taxes but want Avalara to file on your behalf, we'll contact you after the SST registration is complete to assist you.
- You also need your Account/UBI number and Pre-assigned Access Code (PAC). This code can be found on your Washington DOR welcome letter to new businesses. Here's an example.
Tennessee doesn't currently accept an SER for any SST model 1 seller who has a physical location within the state. Your organization can identify if this Tennessee scenario has an impact on your organization in section VIII -- Additional Questions related to SST States -- on the SST Application.
Indiana's collection allowance for a calendar year will be based on the total sales tax for the 12-month period ending on June 30 of the preceding calendar year. The state of Indiana will notify you if there is a change from the initial allowance of .73%. If notified of a different collection allowance rate, please communicate this rate to firstname.lastname@example.org.
|Indiana tax liability for the previous 12 Months ending June 30 - collection allowance for subsequent calendar year|
|$60,000 or less||0.73%|
|$60,000 through $600,000||0.53%|
|$600,000 or more||0.26%|