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S.F. No. 1702 - Vendor Sales Tax Allowance (as proposed by the A-1 amendment)
Author: Senator Ann H. Rest
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: March 20, 2015


This bill provides an allowance for vendors that remit sales and use taxes.  The allowance amount is based on thresholds for taxable sales in a fiscal year and corresponding rates.  Effective for sales and purchases made after June 30, 2015. 




Adds a definition of “net liability” for purposes of vendor remittance.  The definition of net liability is the sales and use tax liability minus the vendor allowance.


Requires that the taxes collected by retailers must be remitted as under current law except for the amount allowed to be retained as a vendor allowance.


Authorizes a vendor allowance that applies if the tax required to be remitted, minus the vendor allowance, is reported and remitted in a timely manner.  Provides that use taxes paid by the retailer on its own purchases are not included in calculating the vendor allowance, but all other sales and use taxes collected by the retailer may be included.  The vendor allowance is based on threshold amounts for sales tax liability in the previous fiscal year.  The minimum allowance is the lesser of $10 or the total amount of sales tax collected during the reporting period.


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