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S.F. No. 237 - Vendor Allowance (as proposed to be amended by A-1 amendment)
 
Author: Senator Scott M. Jensen
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: February 6, 2017



 

This bill provides for a vendor allowance for the costs of administering and collecting sales taxes. The sales taxes remitted would be the amount due minus the allowance. Effective for taxes collected after June 30, 2017.

Section

Provision

1

Adds language to the sales tax remittance requirement to provide that the amount remitted is the net liability of the amount due. Defines “net liability” as liability minus the applicable vendor allowance amount.
 

2

Requires that the amount of sales taxes collected by a retailer, except for the amount of the vendor allowance, must be remitted to the commissioner of revenue.
 

3

Establishes a vendor allowance, which applies only if taxes minus the vendor allowance are reported and remitted in a timely fashion. Requires that use taxes paid by the seller on the seller’s own purchases must not be included in calculating the vendor allowance. Provides the calculation for the amount of the vendor allowance. The vendor allowance may not be less than $10, or the amount of eligible taxes collected during the reporting period. The vendor allowance is calculated at the following rates:

  • 2% allowance for vendors with sales tax liability less than $60,000 in the fiscal year of the calendar year prior to the calendar year in which tax is remitted;
  • 1% allowance for vendors with sales tax liability between $60,000 and $600,000 in the fiscal year of the calendar year prior to the calendar year in which tax is remitted; and
  • 0.75% allowance for vendors with sales tax liability greater than $600,000 in the fiscal year of the calendar year prior to the calendar year in which tax is remitted.
 
 
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