It’s not that I want to pick on any particular state, but South Dakota makes a great example of where the Streamlined Sales Tax Certificate is going wrong. A copy of the form can be downloaded directly from the South Dakota website at http://www.state.sd.us/drr2/forms/businesstaxforms/E1932V10-StreamlinedCertificateofExemption.pdf
South Dakota was one of the first states to publish a copy of the SST form on their website for companies to utilize. Their previous version (2005 edition) was nice and only made one change which blocked out the industrial production/manufacturing exemption. The latest version gets a bit more complicated...
The SST form was modified several years ago to add the Multistate Supplemental page. South Dakota added this as page two in the certificate document file. Then they added page three – the rules directly from the SST guidelines. And then they added page four – an additional section just for South Dakota rules for the SST form.
If two pages of instructions are needed, is this really a simplified form?
The rules South Dakota has presented on page four go into some very specific detail regarding the reasons for exemption. The industrial exemption, though not greyed out, has a statement next to it that says it does not apply. I wonder how many people are still going to mark this selection. Charitable and Religious exemptions now have a statement on the SST form, “SD Permit Required.” This implies that the South Dakota auditor will want to see a copy of the permit. Somewhere in the rules it states that these groups must have a tax exempt permit issued to them from the South Dakota Department of Revenue, not that they are required to present it along with the completed SST form. South Dakota is also kind enough to specify that religious groups must have the letters RS or RE in their permit number and that Resale customers cannot have UT or ET in their permit number.
I suppose I am drifting away from my original scope of discussion. The SST guidelines for exemption certificates were presented to businesses to allow them to focus on making sales and not being tax referees. Good Faith should allow us to accept the certificate as completed, not verify the state ID numbers to certain formats. The form was designed so that common sense could be utilized when completing it, not an additional two pages of rules.
What's been your experience? Do you have other examples of "NOT so streamlined" sales tax certificates?
Other recent “Exemption Certificate Mgmt.” posts by Silvia Aguirre:
- Exemption Certificates for Federal Government Purchases
- Marketplace Fairness: What Does It Mean For Exemption Certificates?
- Will Oregon Start Charging Sales Tax? If So - Are You Ready?
- Canada is Bringing Back Exemption Certificates!
- Louisiana Changes State Forms to Include Parish Exemptions
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