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Main Street Fairness and Exemption Certificates.

author photo of Silvia Aguirre

On July 29, 2011, the U.S. Senate introduced a bill called the Main Street Fairness Act which requires online retailers to collect state sales taxes as local retailers are required to collect them on behalf of consumers. It would certify the Streamlined Sales and Use Tax Agreement and attempt to simplify the online collection process. This bill is similar to one proposed by Congress during the last session. Again, it will not pass, but the movement is still alive. It seems like each time the idea is presented it gains just a little more momentum. With online retailers such as Amazon now supporting it, we should see some changes in how sales tax is done online.

Understandably, the first panic reaction I hear from people is: How will we collect taxes in all the states? The next item that comes up is: How will we collect exemption certificates online? With the Main Street Fairness Act, you need to remember that you will be required to be in compliance with all tax laws. Exempt organizations must have a method with which to deliver their sales tax exemption certificate at the time of purchase or your eCommerce platform will need to include a method to input the data to complete the SST form and sign it electronically.

We are all very interested to see how this progresses as states attempt to balance their budgets by collecting billions in unpaid taxes lost to online sales each year.

Note: Silvia Aguirre is no longer accepting new comments nor questions. More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active. Also use the Site's SEARCH bar to locate other helpful information.

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Comments

Note: Silvia Aguirre is no longer accepting new comments or questions.  More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active.  Also use the Site's SEARCH bar to locate other helpful information.

1 Responses to Main Street Fairness and Exemption Certificates.

  • Posted by R. on August 11, 2011 8:27am:

    Complying with the Main Street Fairness Act will be very easy because our company operates a service named TaxCloud (https://taxcloud.net) which manages retailers’ sales tax obligations for every jurisdiction in the US for FREE.
    In detail, TaxCloud calculates accurate local sales tax (including state, county, city, and special/regional sales tax) in less than 13 milliseconds for any address in the US. In addition to simple calculation, TaxCloud also manages exemption certificates, prepares sales tax returns which can be easily filed by merchants. And for those states which have adopted the SSUTA, TaxCloud prepares monthly reports and debits the accumulated sales tax amounts from the merchant in one transaction, then divides and remits the correct amounts to every jurisdiction along with the necessary sales tax return. Further, in the event of any jurisidictional audit, TaxCloud takes responsibility for that as well. Finally, because TaxCloud has been certified by the SSUTA member states, we can offer full indemnification in the unlikely event of any errors. TaxCloud has been designed to “plug in” to retailers e-commerce shopping cart and order management systems to ensure instant compliance with the MSFA and SSUTA that is easy and completely transparent to the checkout process for consumers.
    We disagree with your assertion that MSFA will not pass. Technology has evolved to the point that complying with the sales tax laws across the country is no longer too difficult.
    It’s worth remembering that this bill, without raising taxes or creating a new tax, helps everyone:
    - Large and small retailers alike, both local and online, would find it easier to collect and remit sales tax;
    - State and local governments would benefit from much-needed revenue that funds vital services
    - States would no longer need to resort to controversial presumed nexus laws
    - States that have already implemented presumed nexus could repeal them
    - Affiliate marketers would no longer be threatened by state-by-state legislation
    - Retailers that rely upon affiliate marketing would be able to continue (or resume) doing so;
    - Consumers would no longer be subject to use tax self-reporting and payment obligations.
    R. David L. Campbell
    Chief Executive Officer
    FedTax (inventors of TaxCloud - a sales tax management service created by online retailers, for online retailers)

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