Sales Tax: Frequently Asked Questions
Since RevSpring is a compliance driven organization, we conducted an extensive Nexus study and taxability review related to our print and mail services during the past 12 months. As result of this study, it was determined RevSpring had previously classified its services as tax exempt in most states. Accordingly, RevSpring has taken steps to voluntarily disclose its compliance issues within the affected states to resolve any past remittance obligations.
Are any other services taxable?
In most states, taxability is based on selling tangible personal property (e.g. a printed communication) and typically service related items (e.g. electronic communications or processing) are nontaxable. RevSpring is planning to conduct a taxability study on its remaining product offering by state in 2018 and will advise if any other services are deemed table in states for which we have nexus.
Why does RevSpring have Nexus in so many states?
Although RevSpring has print production facilities in PA and AZ, we have a service organization that spreads across the United States. Also, we service customers across the entire US and therefore we visit these states often, thereby creating nexus in states that we do not have a physical operation.
How does the recent Supreme Court Ruling on the Wayfair case impact sales tax on print services?
Basically, the decision eliminates the physical presence requirement for sales tax purposes. Accordingly, all print providers will be required to collect and remit sales tax regardless if they have nexus in the state if the print service is subject to tax by state tax code.
Does RevSpring plan to charge sales tax for previous month or in states that taxability is in question (e.g. Pennsylvania)?
No, RevSpring is committed to resolving the past state tax obligations resulting from the failure to bill and collect sales tax on its print services. Customers will be obligated on a go forward basis (i.e. post July 1, 2018).
How is RevSpring determining my tax obligation?
RevSpring is collecting delivery address data on each invoice to determine the amount of tax due by state.
Why are there occasional rounding discrepancies and negative $0.01 tax amount in the line item detail supporting the tax?
This is a result of the tax calculation engine attempting to distribute the net remainder on tax calculation rounding done at the transaction line level to provide the most accurate overall tax result possible at the transaction level. This condition may happen when:
- A transaction has multiple line items with very small taxable amounts
- Tax is distributed to multiple jurisdictions per line
- The tax calculation results in fractional results leading to rounding remainders
Why does the percentage of tax collected seem to vary in certain states (e.g. Florida)?
Sales tax are calculated on each taxable transaction. Some states, such as Florida, use a bracket system for calculating sales tax when the transactions fall below or in between whole dollar amounts. The state multiplies the whole dollar amount by the tax rate and uses the bracket system to figure the tax on amounts less than a dollar.