Frequently Asked Questions

FAQ

Am I required to collect sales taxes?

Merchants are required to collect sales taxes when the customer is in the same state or the merchant has "substantial nexus" in the customer's state.

"Nexus is typically defined by physical presence, but may also be defined by business activity, affiliation or other kind of presence." (see complete definition from Marcum LLP)

Additionally, most states have what is called a "Use Tax" for when the seller is in a different state. This type of tax is the customer's responsibility to pay but is increasingly being collected by vendors at their behest.

"A use tax is a tax imposed by states to collect taxes on sales which do not take place in their state. The tax is meant to insure that all purchases are taxed, whether purchased locally or from out of state sellers."

What is the Federal government doing about these taxes?

This really has nothing to do with the Federal government since sales taxes are existing state laws that states have a Constitutional right to enact and enforce. The latest development involves ten states, and 18 observing states, who are developing plans for a Streamlined Sales Tax System for the 21st Century. This project expects to begin enforcing the collection of sales taxes on remote sales, regardless of the medium through which a sale takes place.

How many tax authorities are there?

There are, in fact, just over 7,000 distinct tax authorities that levy a sales or use tax: 50 states, 1,600 counties, and 4,500 cities.

What about international VAT taxes?

Value Added Taxes are common outside the U.S. and are "consumption-based" like our sales taxes (i.e. the rate is determined according to the location of the consumer). If a U.S. merchant sells to a foreign customer, a VAT would be added upon import that must be paid by the consumer before it can be received. If a foreign merchant sells to a customer in the U.S., the consumer is expected to pay a local "use" tax.

What is the average sales tax nationally?

The average sales tax across the nation is 6.8%, including all regional, county and city taxes. You can view the average combined sales taxes within each state on a map of the USA.

Tennessee, California, Washington, and Louisiana have the dubious distinction of having the highest average general sales tax rates in the nation, of 8.25% or more.

Delaware, Montana, New Hampshire, and Oregon have no sales taxes at all. (and Alaska's average rate is 1.5%.)

Several towns in Tuscaloosa County, Alabama, have the highest combined rate of 11%, while many locations across AL, LA, OK have combined rates of 9% or more. Chicago has the highest combined rate for a metropolitan area at 10.25%.

Questions regarding our AUTOMATED SOFTWARE INTERFACE

How secure is your server?

We are very concerned about the security and privacy of our merchant accounts and transactional data! Firstly, our server is authenticated by Verisign so that all transactions are encrypted and only seen by us. Finally, to protect against any outages or "denial of service" attacks, we have several redundant servers distributed around the U.S. to guarantee merchants 100%, 24/7 access. For more information, please review our Security Statement

Do I need any special equipment or hardware to use your software?

No, only our software running with yours on your web server.

Do I need to be a programmer to use your software?

Probably. We provide a few different ways for you to use our software, but they all require some kind of programming to be able to use the results. We supply a DLL that has both a simple, callable API as well as a "DCOM" interface (if you don't know what that is, don't ask! ;). For the adventurous types, our interface is easy to integrate into a VBA development environment like VB, Excel, Word, or Access. We also supply a simple command line interface to get quick results by hand.

How much does it all cost?

You will be charged an initial setup fee of $375 after you sign up and are ready to download our software. Beyond that, there is an annual maintenance fee of $140 to keep your account current.

Non-automated solutions are also available at a lower cost; please refer to our complete list of services and pricing.

I forgot my password!

We have a helper page to get you back in business.

Where is the STC??

We have offices in PA, near Philadelphia. Use the "Contact Us" link for more information.

STC and the STC logo are trademarks of the Sales Tax Clearinghouse Inc.

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