The SST Registration Process
Part 2 of "Streamlined Sales Tax: From Registration to Maintenance"
This is the second post in a multi-post series. In the first post (“Is Streamlined Sales Tax Right for Your Business” ) blogger Cory Barwick (of CCH) boils it down to three key factors which a company needs to review if they are considering Streamlined Sales Tax for their business.
Great news! You have now decided that Streamlined Sales Tax (“SST”) registration is for you and are ready to move forward with the process. So, what’s next?
The answer is simple: REGISTER!
First - Gather Your Thoughts
The SST registration system is an online application that is available to taxpayers 24 hours a day, 7 days a week. (BTW - You might want to also bookmark this page - should you need to make updates to your SST account in the future.)
As with most standard tax registrations, you will need to provide basic corporate data including the name, FEIN and mailing address - as well phone and fax numbers of the business. The SST will distribute this data as appropriate, to the various (selected) taxing authorities.
In addition to this basic information, you will have an opportunity to inform SST who they should contact regarding your SST registration. This issue should be considered carefully as this individual will also be the individual of record with the various state taxing authorities. As most of us are aware, it is crucial to correctly identify this person to the state taxing authorities in order to get timely information regarding your account since most state representatives will only disclose confidential tax information to the individual on record. (Note: In addition to the person(s) that you name as the authorized representative at your company, SST member and associate member states will also disclose certain tax information to representatives from your technology partner.)
Now, Consider Where You Need to Register
The Streamlined Sales Tax Project currently has 21 Full Member States and 3 Associate Member States that may create sales tax accounts for your business based on SST registration. View a detailed list of the SST states here.
While you will automatically be registered with all Full Member States, it is important for you to understand the difference between those and Associate Member states since you are not required to voluntarily register to collect and remit the sales or use tax of Associate Member states. Most taxpayers find that they still receive benefit by registering to collect and remit an Associate Member state’s tax and ultimately do decide to register, but you are not required to do so. Considering the relevant concepts outlined in Part 1 of this series ("Is Streamlined Sales Tax Right for Your Business") as they apply to your business activities in Associate Member states may help you determine if you will receive benefit and should register. In the end, the decision is up to you.
Once an Associate Member state becomes a Full Member, you will automatically be registered with that state to begin collecting their sales tax if you have not already done so. Your technology partner will work with you as these states come online to update the way that you are collecting and remitting tax for those jurisdictions.
If you are already registered with any of the states that are a party to SST, you will be given the opportunity to disclose that as part of the registration process, so make sure that you know where your business is already registered to collect and remit tax. Upon successful completion of your SST registration, any existing accounts for your business will automatically be converted to SST accounts for you by the tax authorities.
If you fail to check the correct box during the registration process indicating that you already have an account with a state, a new account will be created. If this should happen, you will often have to work the various tax authorities directly to combine the accounts. During this period of time, you may receive notices that you or your staff will need to spend time addressing with the tax authorities until they are cleared.
Selecting Your Technology Partner
One of the most important pieces of your SST registration is the determination of how you will actually collect and remit tax. Will you use an approved software vendor or will you build your own system? Perhaps you already have a sales tax system and just wish to register in all SST states and continue collecting and remitting as you already are? While there are distinct advantages and disadvantages of all of these, most taxpayers register with SST as either a “Model 1” or “Model 2” seller and select an approved technology partner that they use to calculate and remit tax.
The primary difference between the model of seller is who will actually be remitting the tax that your company collects - and who is ultimately responsible for that tax under SST audit.
A Model 1 Seller is a seller that chooses to, in effect, outsource their SST tax function to their technology partner. The technology partner will work with them each filing period to file any returns that are due for SST states and, if applicable, any non-SST states. Your technology partner will also be party to the two year SST audit cycle and will work directly with SST states on your behalf. Selecting to conduct business as a Model 1 seller has the added advantage that the states compensate your technology partner directly for filing voluntary returns for you thereby decreasing the overall cost of ownership of the sales tax application.
A Model 2 seller, on the other hand, is an SST registrant that licenses software from an approved SST software vendor and files SST returns directly with the tax authorities through that software. Your company is responsible for all aspects of the collection, remittance and audit processes. You will work with your approved software provider to configure the software and then you will work the various states to test the configuration to ensure that you can successfully file the Simplified Electronic Return format required by the Agreement.
A complete listing of SST approved software vendors and technology partners can be found on the SST website. Make sure that you have reviewed this list prior to your registration and, if necessary, you have contacted your selected vendor as well. Once you complete your SST registration, you will have a limited amount of time to enter into a relationship to begin collecting and remitting tax so having that relationship in place prior to SST registration might be helpful. I will have more about working with your technology partner in the next installment of this series.
SST does not have a preferred relationship with any vendors listed on its website. All of these providers have been approved by the same certification process and are subject to the same rules. So, approach this as you would any other software purchase: get to know your partner and make sure that the solution that you select is the one that is correct for your company’s needs.
That’s it! You have all the information filled out and are ready to go, so make note of your new SST username and password, give it one final review for accuracy and click that button!
Stayed tuned for Part 3: “Getting to Know Your Technology Relationship”
Please feel free to post comments or questions regarding the SST process below - or send me a direct e-mail. BTW - In addition to our SST blog posts (below) - don't forget to check these other Streamlined Sales Tax (SST) resource pages on SalesTaxSupport.com:
Other recent “Streamlined Sales Tax (SST)” posts by Cory Barwick:
- Ohio SST Membership Nod: A Very Tasty Carrot Indeed!
- Streamlined Sales Tax: Will Ohio Go For $20 Million Carrot?
- Dear Streamlined Sales Tax… Where Have You Been?
- Oregon Sales Tax? Say it ain't so!
- Hey Maine! Ready to Simplify Sales Tax?