Streamlined Sales Tax Agreement Certificate of Exemption Instructions

A seller can issue the drop shipper with an exemption certificate requesting resale if the drop shipper delivers products that the seller has sold to the seller`s customer. Do not send exemption certificates to the Simplified Sales Tax Board of Directors or to the states. Purchasers must present the completed exemption certificate to their supplier and keep a copy for their records. If a direct consignor delivers a product to the seller`s customer in a fully streamlined Member State, the seller may use the seller`s sales tax identification number of the seller`s State on the exemption certificate provided to the drop shipper. The seller is not required to provide a VAT identification number of the State of origin of the sale when purchasing products for resale. This does not apply to direct deliveries of digital services and products. State laws determine whether a seller may provide a seller or other seller with a resale exemption certificate for the sale of digital services or products. If the Seller does not collect and transfer the VAT due, the Seller`s customer must pay the user tax directly to the State, unless the Customer can request a valid exemption. Additional documentation indicating that the state agrees to the use of your exemption or resale number can be found on the state`s certificate of compliance. To view the drop shipping criteria, click the status to open the certificate. Then, scroll down to section #317080. For more information on exceptions or exempted bodies of a particular state, please contact that state.

Sellers registered through the Simplified Sales Tax Registration System (SSTRS) must collect and pay sales tax in each state in which they are registered if the product sold is from that state. If Seller`s customer provides Seller with an exemption certificate, Seller shall not levy VAT or excise duty on such transaction. Sellers and suppliers should inquire with each state where they make sales if they need to register, collect and pay sales tax or consult the guidelines for distance sellers and sellers in the marketplace. If you are requesting an exemption from sales or use tax on your purchases, contact the state where you are requesting the exemption. The Streamlined Sales Tax Agreement, a multi-state agreement that provides for the simplification of the country`s various sales tax laws. These states include: Indiana, Iowa, North Dakota, South Dakota, Tennessee, and Wyoming. A shipper is required to collect and pay VAT unless an exemption applies. You are required to keep a completed exemption certificate or to record and store the standard data elements of the certificate in electronic form. (SSTGB Rule 317.1.A.10) Do I need to obtain and keep hard copies of my clients` exemption certificates? If the Drop Shipper receives a completed exemption certificate from the Seller, the Drop Shipper will not be liable for VAT on the products it has delivered to the Seller`s customer in a Streamline member state. According to the agreement, the procedure for obtaining an exemption from VAT on the basis of diplomatic or consular status remains similar to previous procedures.

Please note that this procedure only applies to purchases made in the countries listed above. The process of obtaining a tax exemption for purchases made in all other states and the District of Columbia has not changed. In order for foreign missions, international organizations or their eligible members to benefit from a tax exemption for purchases in the above states, the following procedure must be followed: Drop Shipper`s (Third-Party Supplier) Tax Liability 6. The buyer must sign and date the certificate. If you have any questions or concerns about this new procedure, please contact the GFO Tax and Customs Program by phone at (202) 895-3500 ext. 2 or by email at ofmtaxcustoms@state.gov. Exception: Tennessee requires the seller to provide the drop shipper with a Tennessee resale number when the sale is made in Tennessee. The Office of Foreign Missions advises all diplomatic missions, international organizations and persons who are assigned or planning to travel to the States listed at the beginning of this notice to make photocopies of the Simplified Sales Tax Agreement Exemption Certificate. A drop ship occurs when a seller sells a product, then buys the item from a third party and asks the third party to ship the product directly to the seller`s customer.

The third-party provider is called drop-shipper. PowerPoint Guide to Completing the Exemption Exemption Certificate: If your business is registered through the simplified registration system, some states may accept your company`s ITSS when purchasing items for resale. .