If you're new to SST and Avalara, see Get started with Streamlined Sales Tax.
What is the Streamlined Sales and Use Tax Agreement?
Created in 1999, the Streamlined Sales and Use Tax Agreement (SSUTA) is the result of a cooperative effort between state and local governments and the business community. The goal of SSUTA is to simplify sales and use tax collection and administration for all sellers and all types of commerce by making sales tax administration requirements less burdensome. Participating states must simplify and centralize aspects of sales tax administration. For some companies, SST offers critical tools to help address ever-changing sales tax regulations. For others, the benefits of SST are less obvious.
For more info on the program and participating states, see Avalara's official FAQ.
Which states participate in the SST program?
There are 24 SST full member 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, and Wyoming.
For more information, refer to the official Streamlined Sales Tax website.
Pennsylvania has a state-run program providing similar benefits of using a Certified Service Provider.
What are the SST service models?
The SSUTA recognized that no matter how simple and uniform they could make the different state and local sales taxes it was impossible to completely eliminate the burden. A seller must know what to tax, what rate to charge, how to file a return, and how to remit the tax. So, recognizing that simplification via policy was not going to be enough, they needed to encourage sellers to implement a technology solution that simplified compliance. The SSUTA incentivized companies to use software by certifying the accuracy of the software and by paying for the software in certain instances.
The following service models are available with Avalara:
- Model 1 - Certified Service Provider (CSP): An Agent certified under the SSUTA who registers the seller in the SST program as the seller’s CSP and performs all the seller’s sales and use tax functions. The software system of a CSP identifies which products and services are taxable, applies the appropriate tax rate, interfaces with your accounting system, and files the tax return and remits the tax to the appropriate taxing authority. Each member and associate state certify the accuracy of the software and provides liability relief for errors that may result in the incorrect calculation of the tax amount (the CSP can provide additional information regarding their relief). In addition, these services are to be paid for by the member and associate member states, at no cost to you, if you qualify in the participating SST states.
- Model 4 – Other: A seller that registers with the SST program and chooses to calculate its tax on its own or using AvaTax, prepares its own tax return or engages Managed Returns to process and file the tax returns on their behalf. A Model 4 seller may be contracted with Avalara to perform tax services, but Avalara is not performing as a CSP.
How to qualify for SST benefits?
A qualifying SST seller is one who meets all of the following criteria during the 12-month period immediately preceding the date of registration with the SST state:
- 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.
Qualifying sellers enjoy the following benefits:
- Free sales tax registrations
- Free sales tax calculations
- Free sales tax returns preparation, filing and remittance
- Free sales tax notice management
- Free audit liaison support
From the state, Avalara receives a compensation that equals a percentage of the tax collected. Compensation that Avalara receives is reflected in your returns as a reduction to the tax paid to the state. This does not impact your liability; this is the compensation Avalara receives from your qualifying states for CSP services rendered.
What are the benefits of Volunteer vs Non-Volunteer status?
|Free sales tax registrations||Yes||Yes|
|Single identification number to file and pay taxes in registered states||Yes||Yes|
|Uniform filing forms and exemption certificates||Yes||Yes|
|Access to boundary and rules data||Yes||Yes|
|Centralized source of updates and information regarding sales tax rules and regulations||Yes||Yes|
|Free sales tax calculation||Yes||No|
|Free certificate exemption within sales tax calculation software||Yes||No|
|Free preparation, filing, and remittance of sales and use tax returns||Yes||No|
|Free SST notice management||Yes||No|
|Free audit support||Yes||No|
What are the benefits of joining SST with Avalara as your Certified Service Provider (CSP)?
SST program can help make sales tax compliance easier and more affordable by offsetting the cost of using a tax technology provider, such as Avalara, who has been certified by the Streamlined Sales Tax Governing Board (SSTGB). Along with the end-to-end support of using a tax technology provider, customers receive the added benefit of audit support.
Avalara is one of four CSPs. Using a CSP means the tax technology solution integrates with existing software to simplify sales tax collection and compliance for businesses. 25 states cover the cost of using Avalara as customer's end-to-end solution for sales tax calculation, returns preparation, returns filing, remittance, and audit protection for qualified sellers. In addition to cost savings, there are additional advantages for all participants including a single identification number and single form for all participating states’ registrations and returns. This ensures consistency and greater accuracy across all channels and removes much of the administrative burden from customers so they can get back to growing their business.
24 states are officially part of the SST program. In addition, Pennsylvania has a state-run program providing similar benefits of using a CSP.
25 states cover the cost of using Avalara as customer's end-to-end solution for sales tax calculation, returns preparation, returns filing, remittance, and audit protection for qualified sellers. By engaging Avalara as your CSP you will receive the following benefits:
- Streamlined Sales Tax Registration
Avalara completes your online SST Model 1 registration with the desired 24 states as part of your GoLive process, free of charge.
- Single SST identification number
This is a universal number that is used to file and pay taxes for all SST Model 1 registered states.
- One time and place
The ability to register or update registration data with all the 24 registered states at one time and place.
- Rates and boundaries
Rates and boundaries are supplied directly from the state. Each state participating in SST is required to provide a rate and boundary file. Each member state shall relieve sellers and CSPs using the approved quarterly rates and boundaries files from liability to the member state and local jurisdictions for having charged and collected the incorrect amount of sales or use tax resulting from the seller or CSP relying on erroneous data provided by a member state on tax rates, boundaries, or taxing jurisdiction assignments.
- Taxability matrix
A taxability matrix includes uniform definitions of products and services. Each SST state is required to provide and maintain an active taxability matrix which can be found on the SST website.
SST state relieve sellers and CSPs from liability in the event that an incorrect amount of sales or use tax was charged and collected resulting from the seller or CSP relying on erroneous data provided by the SST state in the taxibility matrix.
- Automatic calculation of vendor discount
Calculations for vendor discounts for SST states are done automatically, and reduce your liability to the state for the period in which the tax is due. The vendor discount is calculated for all applicable SST states in accordance with SST state laws.
- Audit liaison
Avalara is contractually obligated to supply the SST states, on an annual basis, with transactional data supporting the monthly remittances for SST volunteer sellers. During an audit of a model 1 volunteer seller, the SST state must go through Avalara (CSP) during the audit, rather than auditing the model 1 volunteer seller directly. All audit questions are presented to Avalara. Avalara then reaches out to the model 1 volunteer seller electronically to collect any additional supporting documentation that is required for the audit. In some circumstances, the model 1 volunteer seller will be held liable for any additional taxes, including any penalties or interest that are assessed within an audit. For SST model 1 non-volunteer sellers, the state will contact your organization directly if they plan to perform a sales tax audit.
- Less risks
Use of a CSP reduces risk with simplified and uniform rates, decisions, and rules, plus audit support. Following are some benefits:
Creates simplified and uniformed sales and use tax rates, reducing the risk of paying incorrect sales tax.
Determines taxability using state supplied tax rates and remits tax timely to each jurisdiction.
Shifts the burden of the audit to the CSP.
The SSUTA offers an amnesty program for associate states and the first year of any new full member states. To qualify for amnesty, a seller had to register with SST and remain registered for 36 months. The seller's uncollected and unpaid sales and use taxes are completely forgiven for all periods before the registration. Amnesty is not available for sales or use taxes already paid or remitted to the state or for taxes collected by the seller. In addition, amnesty does not apply to any matters for which the seller had received an audit notice. Only sales and use taxes are covered by the amnesty program. Additional details about the amnesty program are available on request.
In order to qualify for amnesty in Tennessee, you must register for and participate in the SST program in all 24 states on or before registering for Tennessee.
What are the system requirements for model 1 sellers?
To provide the benefits of the SST program to customers, transaction and exemption data should be uniform and meet certain requirements set forth by the governing board. For detailed requirements, see:
How do you apply?
How do you transition to SST?
After applying for SST with Avalara as your CSP, manage the following details to make your transition seamless.
- Registration – After your organization is registered with SST, you are assigned a single SST state identification number, which is used for all SST state filings. Your SST identification number starts with an "S" and is followed by 8 numbers.
- Filing Frequency Transition – For any SST state in which you were previously remitting sales tax on a filing frequency other than monthly, your organization is required to remit the previous months of the current filing period to the state using a short period return. If you originally filed by paper, write at the top of the return "short period return" and remit the necessary tax as soon as possible to eliminate any late notices, penalties or interest. If you file electronically, contact the SST state and notify them of your SST registration; then ask the SST state the best way to remit your previous tax liability.
- SST State Notices – Please scan and submit any notices you receive from SST states and submit them to us by opening a support case. A dedicated SST notices team resolves any issues that arise.
How does SST impact CertCapture users?
By default, Tax Number Type and Business Number Type are required fields when validating documents for states that are in compliance with the agreement.