Beginning July 1, 2021, both in-state and out-of-state retailers will be required to implement the “destination-based” sourcing rules for collecting and remitting State, Special District, state-collected county and city, and participating home-rule jurisdictions sales taxes.
To assist retailers, the DOR has now gone live with its Geographic Information System (“GIS”), as part of its new Sales and Use Tax System (“SUTS”), a “a one-stop portal that will allow taxpayers to do all manner of tasks related to collecting and remitting sales and use tax in an easy, automated, and seamless fashion.” Using these tools, retailers can obtain reliable information on the exact taxes that need to be charged, collected, reported, and remitted to the state based on the buyer’s address.
Starting July 1, 2021, the destination-based sourcing rules are mandatory, and retailers not correctly applying these rules risk audit and significant deficiencies and penalties. As an additional warning, the DOR is advising all retailers who have used, or will continue using, third-party address databases to check to be sure the database conforms with the most recent information available on SUTS. If not, the retailer will be held liable for any differences.
If you are a retailer subject to these new rules, contact one of the attorneys at Anderson & Jahde to ensure you are fully prepared to implement them.