Liability of certified service provider as agent of seller; liability and auditing of seller who contracts with certified service provider; system checks of sellers. [Effective January 1, 2006.]
1. A certified service provider is:
(a) The agent of each seller with whom the certified service provider has contracted for the collection and remittance of sales and use taxes; and
(b) Liable for sales and use taxes due each member state on all sales transactions it processes for a seller unless the seller misrepresents the type of items it sells or commits fraud.
2. A seller that contracts with a certified service provider is:
(a) Liable to this state for sales or use taxes due on transactions processed by the certified service provider if the seller misrepresents the type of items it sells or commits fraud;
(b) Subject to audit on the transactions processed by the certified service provider if there is probable cause to believe that the seller has committed fraud or made a material misrepresentation; and
(c) Subject to audit for transactions not processed by the certified service provider.
3. The member states acting jointly may perform a system check of the seller and review the seller’s procedures to determine if the certified service provider’s system is functioning properly and the extent to which the seller’s transactions are being processed by the certified service provider.
Last modified: February 27, 2006