Faq - Sales Tax Managment Software

Exactor Frequently Asked Questions (FAQs) Topic

Accounting Software

Question

My accounting software is not calculatng taxes

Reponse

For security purposes, Exactor requires that each transaction requirs a valid Exactor issued Marchant ID (numeric); and a valid user name.

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You should check that the Merchant ID issued byExactor is being used in the accounting software and that the correct user name is also being used. You can verify the user name in your Exactor admin account, in the "Manage Users" tab. Make sure that spelling is identical (the system is also case sensitive) For more information, you should consult the User Guide

Key Words Level 2 Level 3 Topic

Accounting Software

Question

Once I set up my account, what additional work will I be required to perform?

Reponse

Once set-up, all that you will need to do is supervize, manage and review your returns. Exactor is designed to meet ALL of your sales tax compliance needs.

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The fully automated Exactor system reduces the risk of misplacing or forgetting about a specific transaction. The suite’s full integration into your accounting program means that all you need to do is enter the transaction into your transaction document (invoice, purchase order, credit memo, etc) , then click save as you would for any other book-keeping program. Exactor is designed so that you do not need to perform additional activities. It avoids rqeuiring you to enter any additiona key entries. Once you click "save" Exactor begins to work: your system connects to the Exactor service, which calculates the tax for the transaction and enters it into the invoice right before your very eyes. The data then gets stored on the central Exactor server (for reports and returns generation at a later date).

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 1 of 49

Topic

Accounting Software

Question

Can I download transactions from my shopping cart to my accounting program?

Reponse

Yes. Exactor's plug-ins allow you to upload transactions from the Exactor admin site directly into your QuickBooks program. What this means is that transactions that were inputted straight into your Exactor admin site, or transactions that originated from another source, such as your shopping cart, and were run through the Exactor system for calculation purposes (regardless whether or not sales taxes applied), can be downloaded in their entirety into QB, thus effectively bridging between your e-commerce shopping cart and your QB system.

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Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

Shipping & Handling (S&H), how does Exactor treat S&H expenses

Reponse

Exactor has sophisticated logic that performs many tasks before looking up the tax rate. Amongst these are looking and applying the correct tax rules to the type of S&H that you are using. Exactor does not apply a generic rule to S&H, because that would lead to inaccurate results.

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Shipping and handling may be exempt from taxes, but often times they are taxable. Many times taxability will be determined by the state dependig upon the answer to questions such as (i) where does title pass to the buyer: and (ii) are the handling and shipping epenses combined in the invoice, or stated seperately. Exactor treats S&H like any other line item, and determines taxes owing depending upon (i) the type of S&H service; (ii) which carrier is used; and (iii) the state rules governing the transaction. Like any other product, different states have different rules for S&H. What makes it even more complicated is that different types of S&H may receive different treatment even within the state. This is the reason that Exactor looks at the type of S&H you use, and applies the rules of the state that govern that specific type of shipping and handling.

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Tuesday, January 27, 2009

Page 2 of 49

Topic

Calculating Taxes

Question

Why shouldn't I use a simple tax rate table?

Reponse

Sales tax is not as simple as taking a ZIP code and identifying the matching tax rate (this is what simple rate tables do). Calculating taxes using this method will generate incorrect results, and cause your exposure to tax liability. The fact is that not one of these tax rate tables are certified by the State taxing agencies under the Streamline Sales Tax (SST) project. The reason is that state taxing agencies recognize that looking up tax rates by ZIP codes leads to incorrect results.

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Exactor has sophisticated logic that performs many tasks before looking up the tax rate. These include (i) cleaning up the address, so it conforms to USPS guidelines; (ii) identifying the precise location of the transaction, using physical address; geo codes; FIPs codes, and does not rely just on zip or zip+4; (iii) identifying whether or not the specific product is taxable; (iv) determining whether there are any relevant tax holidays; and only then – (v) applying the correct tax rate. Flat Tax Tables simply do not have this kind of built-in logic, causing the user to oftentimes charge incorrect sales taxes.

Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

I have noticed a discrepancy between the tax rate being charged by Exactor and the rate in the published tables.

Reponse

This issue is that of the different methods for calculating taxes, and rounding errors that are directly resulting from each method. When you multiply the total invoice amount by the compounded tax rate, you will receive the result that you are referring to. This means that you have totaled all of the invoice line items together, multiplied the result by the tax rate, and the tax amount is rounded once per invoice.

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Exactor's system achieves a higher level of accuracy, albeit it might not seem so in this example. The Exactor system treats each line item as a stand alone transaction, and calculates taxes owing for each line item by the different applicable individual tax rates (state, county, city and special district). You will typically see multiple calculations for each different line item, resulting in a number of calculations (and rounding calculations) per invoice that is the product of the number of line items multiplied by the number of taxing agencies.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 3 of 49

Topic

Calculating Taxes

Question

Why doesn't Exactor calculate taxes for the entire invoice? Why does it calculate taxes for each line item?

Reponse

Performing line-item break downs leads to the highest level of accuracy in calculation, and provides a more accurate, fully trackable audit trail. Calculating taxes for the entire invoice would mean that you do not benefit from preferred tax treatment that some of the line items might benefit from (such as being tax exempt; tax holidays or simply reduced tax rates). By drilling down to the line item level Exactor makes sure that each item is taxed in the correct manner using the accurate rate it should be taxed at. This is the method that is required, and according to which Exactor was certified, by the SST. In other words, under SST state reporting requirements, Exactor is required (it is not discretionary) to perform separate calculations for each line item, and then aggregate them up to the invoice level, and finally to the reporting level.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 4 of 49

Topic

Calculating Taxes

Question

When I take the invoice amount and multiply it by the tax rate, I get a tax amount that is slightly different than the amount calculated by Exactor.

Reponse

This issue is that of the different methods for calculating taxes, and rounding errors that are directly resulting from each method. When you multiply the total invoice amount by the compounded tax rate, you will receive the result that you are referring to. This means that you have totaled all of the invoice line items together, multiplied the result by the tax rate, and the tax amount is rounded once per invoice. Exactor's system achieves a higher level of accuracy, albeit it might not seem so in this example. The Exactor system treats each line item as a stand alone transaction, and calculates taxes owing for each line item by the different applicable individual tax rates (state, county, city and special district). You will typically see multiple calculations for each different line item, resulting in a number of calculations (and rounding calculations) per invoice that is the product of the number of line items multiplied by the number of taxing agencies. One might ask then why does Exactor not perform the calculation on an invoice basis, thus reducing the place for rounding errors. This might be a valid argument on a limited invoice basis, however it would still lead to the same errors on a tax reporting basis where taxes are calculated on an aggregated basis for the entire reporting period (in other words, invoice amounts are aggregated). Furthermore, different states perform their local taxes roll ups (and roll downs) differently. Some take all taxes, roll them down to the local level, and require calculating and reporting at that lower level. Others require breaking the taxes down to each level, and performing the aggregated calculation at each local level separately, and then performing a roll up. So, as you can see, even the aggregate invoice calculation method is not error free, and leads to a higher level of untrackable errors. Performing line-item break downs leads to a much higher level of accuracy in calculation, and provides a more accurate, fully trackable audit trail. In fact, this is the method that is required, and according to which Exactor was certified, by the SST. In other words, under SST state reporting requirements, Exactor is required (it is not discretionary) to perform separate calculations for each line item, and then aggregate them up to the invoice level, and finally to the reporting level.

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Tuesday, January 27, 2009

Page 5 of 49

Topic

Calculating Taxes

Question

Is it possible just to enter the total amount of sales for this period and calculate the tax that way?

Reponse

You could definitely do that, all you would need to do is enter a gross amount, and Exactor will determine the taxes on that amount. Exactor does not require a per line-item / transaction break-down. The only reason to provide the transaction breakdown is for audit purposes, and if there are items that are not taxable. If the assumption however is that everything is taxable, then the single entry option is definitely a workable solution.

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Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

Can I back-date the Commit Date

Reponse

Exactor's systems are set up to allow you to back-date an invoice up to the last closing date of the Exactor account books. Exactor will typically close the account books on the 5th calendar day of a month (adding an extra day or two if the 5th falls on a weekend or holiday), giving you several days in each month to update your records for the preceding calendar month. Once the Exactor account books are closed, changes can only be made with the assistance of the Exactor admin. The reason for this security feature is because once the Exactor account books are closed, Exactor proceeds into processing transaction information for generating, and generating the tax returns. Making changes to transaction data once returns are being generated would impede the integrity and accuracy of the tax returns generated by Exactor.

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Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

Can I submit a transaction without a date?

Reponse

No. Exactor requires that you use a valid date in order to properly calculate the taxes.

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Tuesday, January 27, 2009

Page 6 of 49

Topic

Calculating Taxes

Question

I have applied a personal exemption, but Exactor is still calculating taxes.

Reponse

Exactor will apply an exemption only if Exactor determines that the exemption applies to the transaction.

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To begin with, the exemption must be listed in the Exactor system. You do not need to use the ID number issued by Exactor for each exemption, however you must use the identifying number that you used when listing the exemption in the Exactor system. Furthermore, as part of this verification, Exactor checks that the transaction falls within the ranges of the effective dates of the exemption and the states where the exemption is valid. For example, if an exemption is valid in California, but the transaction occurred in New York, the exemption will not be applied, and taxes will be applied to the transaction.

Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

I have Nexus in one state only, and for now, I want to make the tax call to Exactor only for orders within that state. Can you advise as to any downside or considerations for that approach?

Reponse

Let us start by stating that Exactor will be happy to provide you with any level of service that you may require. Exactor is merely a tool to help you with whatever you feel are your needs.

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That being said, you should take note that Exactor runs any transaction that comes through to our system in order to evaluate nexus / taxability / tax owing. You could add a filter on the shopping cart or accounting softwarre to filter transactions that come through to our system, and we would run only those transactions that come through to us. The plus is obviously some cost saving that you may realize on the transaction level volume. However, the downside is that there is an increase of potential for liability on your side. Exactor is responsible over transactions that come through our system, but cannot be responsible for transactions that do not come through to our system. The filter you would install may net some false negatives, blocking out transactions that should be included. Also without other transaction information, we may be prevented from generating an accurate tax return.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 7 of 49

Topic

Calculating Taxes

Question

What happens if the buyer has a personal exemption?

Reponse

Managing exemptions is often the most difficult part of the sales tax process. While not a complicated task, exemption management can be extremely time-consuming. The last thing that any sales person wants to do is stop a transaction in mid stride to obtain an exemption certificate. The ExactorExempt module is designed to automate the process of creating, tracking & managing exemption certificates, without impeding the flow of the transaction. The module enables uploading of exemption information in real time, either before or after transaction initiation, and provides for cross-referencing of an exemption certificate to multiple transactions. The purchaser is no longer required to produce multiple certificates, but instead can upload one certificate and use it across multiple transactions and with all Exactor-enabled vendors. ExactorExempt can also be fully integrated into an online shopping cart, so that data can be uploaded in real time, as the transaction is being processed.

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For more information, you should consult the Uer Guide

Key Words Level 2 Level 3 Topic

Calculating Taxes

Question

What if I want to simply compute taxes not for a transaction? Must I put all the information through to the EXACTOR server?

Reponse

No. Exactor Suite comes with a dedicated interactive tax calculator module, that you can access through your admin site. This is especially useful if (i) you are simply interested in knowing the tax rate for a certain scenario; (ii) you have atransaction that was not run through the Exactor system; or (iii) low-volume merchants who do not require high volume capacity and who are interested in using a stand-alone web interface.

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The system recognizes the difference in taxation related to shipping to & from information, and even enables inputting exemption details. The tax calculator is made available to all merchants on their admin site, allowing them to perform single or ad-hoc tax calculations, and then choose whether or not to commit those ad-hoc calculations to the Exactor system.

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Tuesday, January 27, 2009

Page 8 of 49

Topic

Calculating Taxes

Question

How does Exactor determine taxability of a product?

Reponse

Exactor has a built-in product taxability matrix in the system that defines product exceptions, product types, and categories. The majority of products are taxed under the standard rate for the applicable state and local tax district. .

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

How do I log into my account?

Reponse

Every client of Exactor has an admin site where they can view and manage their account. You can log into your account by going to: https://merchant.exactor.com/account/ You will need your (i) account number; (ii) user name; and (iii) password. This information was sent to you when you first opened yoiur account.

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Please contact your Exactor account representative if you do not have this information.

Key Words Level 2 Level 3 Topic

Exactor Account

Question

I do not remember my password?

Reponse

Do not worry. You can reset your password from the log-in page, located at https://merchant.exactor.com/account/. Simply click on the "Do not remember my password" button. Exactor will reset and send you your new password to your email that you have listed. You will be required to change your password once you log into your account.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 9 of 49

Topic

Exactor Account

Question

Where do I find my User name?

Reponse

Your user name was sent to you when you first opened yoiur account.

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Please contact your Exactor account representative if you do not have this information.

Key Words Level 2 Level 3 Topic

Exactor Account

Question

What is the CSP Checkbox?

Reponse

If you are interested in benefiting from Exactor's CSP services, you should check this box. CSP services are tax calculation, filing and payment services provided by Exactor which are certified by states that are Member of the SST to be accurate, reliable and safe. The Member States stand by this certification, and awards certain benefits for using the CSP services, including limited liability and limited audit exposure.

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

What is meant by FEIN/SSN?

Reponse

An FEIN is a Federal Employer’s Identification Number. For further information or to apply for an FEIN, please go to www.irs.gov and request form SS-4.

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An SSN is a social security number. If the business is a sole proprietorship, enter the SSN of the owner of the business.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 10 of 49

Topic

Exactor Account

Question

I mistakenly used the wrong FEIN when I registered with SST. How do I fix it?

Reponse

A seller cannot change the FEIN or Social Security fields once they have registered with SST. If you need to fix an FEIN you should notify your Exactor rep, who will coordinate the change with the SST Administrator.

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If a seller wants to change the ownership they must cancel the current registration and apply for a new SST ID.

Key Words Level 2 Level 3 Topic

Exactor Account

Question

What is entered in Legal Name?

Reponse

Enter the legal name of the business. If the business is a sole proprietorship, enter the name of the person owning the business.

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

What are the limitations on my User Name

Reponse

The only restriction imposed by the Exactor system is that the User Name must be between 6 an 12 characters. The system is case sensitive. You can create as many user names as you need.

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We typically recommend that you create different user names for each user of the system. This is good practice for control and auditing purposes. By using different user names for each user, if someone leaves your company, you can easily deactivate their user name, and prevent them from accessing the account. It also provides you with a good auditing tool to see who made what changes, and when.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 11 of 49

Topic

Exactor Account

Question

Should I use my User Name for my shopping cart? For my invoice?

Reponse

We typically recommend using a different username for the actual input tools than the user name for the administrative personnel (the physical person). For example, we recommend creating a different user in the XML used by your shopping cart, or by your invoice (creating a special user for the shopping cart). This practice allows a clear separation in the Exactor system between transactions and events that are added inserted by the shopping cart (invoice, etc) and those that are created by the physical user. It is a good practice also for reporting purposes, auditing purposes and error bugging. There is no limitation on the number of users, so creating additional users for this purpose is not a problem.

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

What is meant by State of Incorporation or Organization?

Reponse

Enter the state where the business is incorporated or the state where the company is organized.

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

Do I need to provide Exactor with an SST ID number?

Reponse

No. If you have not yet registered with SST, but are interested in registering with the SST, Exactor will be happy to perform the registration on your behalf, and provide you with your SST ID number.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 12 of 49

Topic

Exactor Account

Question

Do I need to provide you with State Tax ID numbers (other than SST IDs)

Reponse

Yes. Unfortunately, Exactor cannot file tax returns on your behalf without Tax IDs for each state. Registration requires knowledge of information that is specific to your company, which Exactor will typically not have (with the exception of SST states, where Exactor can perform the registration on your behalf). We therefore cannot perform this function on your behalf. Your Exactor rep will be happy to provide you with information, URLs and web sites where you can register with each state. Once you provide Exactor with your tax ID, we will be able to start filing tax returns on your behalf.

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Key Words Level 2 Level 3 Topic

Exactor Account

Question

What is a NAICS code?

Reponse

Exactor uses this code to identify your type of industry. This may sometimes effect your tax filing.

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The North American Industry Classification System (NAICS) is a unique 6 digit system for classifying business establishments according to their primary industrial activity. Please choose the 6-digit code that most closely identifies the seller’s primary business activity. The following web link may be used to look up a NAICS code. http://www.census.gov/epcd/www/naics.html

Key Words Level 2 Level 3 Topic

Exactor Account

Question

How Do I Manage Access to my Account

Reponse

Access to your account is managed by the different user names that you can add to your account. You can create as many user names as you need. We typically recommend that you create different user names for each user of the system. This is good practice for control and auditing purposes. By using different user names for each user, if someone leaves your company, you can easily deactivate their user name, and prevent them from accessing the account. It also provides you with a good auditing tool to see who made what changes, and when.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 13 of 49

Topic

Exactor Account

Question

How Do I restrict access to my account from someone who has left my company?

Reponse

By using different user names for each user, if someone leaves your company, you can easily deactivate their user name, and prevent them from further accessing your account.

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Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

How does Exactor know where to file / report tax returns

Reponse

Exactor files returns only in those locations that you tell Exactor you have an obligation to file. Exactor does NOT make any independent evaluation of where you must file your returns. Exactor will generate tax returns for the states and jurisdictions which are checked in the Nexus and Filing Information page of your Exactor admin site.

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Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

How do I update the states where Exactor will file my returns

Reponse

Exactor allows you to define those states in which you have a reporting obligation. The Nexus & Filing Information page is loaded from within your Exactor admin site, in the "Account Management --> Nexus & Filing Information" tab.

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The Nexus & Filing Information page defines those states in which the user authorizes Exactor to provide calculation and tax return filing services. You should identify states in which you have nexus or otherwise a reporting obligation, and make sure that they are checked accordingly ( Unchecked state means that Exactor will NOT provide tax calculation and tax filing services for transactions that occur within that state.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 14 of 49

Topic

Filing Tax Returns

Question

Why isn't Exactor filing my return?

Reponse

Exactor will file returns only in those states that you define for Exactor to file. Exactor allows you to define those states in which you have a reporting obligation. The Nexus & Filing Information page is loaded from within your Exactor admin site, in the "Account Management --> Nexus & Filing Information" tab.

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Unchecked state means that Exactor will NOT provide tax calculation and tax filing services for transactions that occur within that state. If Exactor is not filing returns in a state that you are expecting, you should go back to your Exactor admin page, and the "Account Management --> Nexus & Filing Information" tab. Make sure that the state you are looking for is checked.

Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

How often does Exactor file my returns

Reponse

When defining where you want Exactor to file your tax returns, you also define how frequently you want Exactor to make this filing. Typically the state will tell you how frequent you must make the filing (monthly; quarterly; semi-annual; annual). Exator will make the filing according to the frequency that you define.

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Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

Do I need to be concerned about missing a filing deadline?

Reponse

No! Every state has diifferent filing deadlines. Some require the return to be received by the 20th day; other will settle for a post-mark of the 20th; others require that the return be received by the end of the month, etc. Exactor has an automated system that tracks all of these different requirements, andassures that tax returns are filed in a timely manner. As long as you approve the return and your tax account is funded within the time frames defined by Exactor, Exactor will make the filing for you in a timely manner.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 15 of 49

Topic

Filing Tax Returns

Question

What happens if I do not approve my return?

Reponse

Exactor WILL NOT FILE A RETURN IF IT IS NOT APPROVED BY YOU IN A TIMELY MANNER.

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Exactor acts as your agent and representative. It cannot file a tax return without your approval. Exactor takes all steps to assure that are ready and available for yor approval in a timely manner. If you fail to approve the return Exactor will not proceed with the filing. Exactor will not be responsible for any late fees and penalties that may accrue from a late filing that is a result of your failure to approve the reuturns in a timely manner.

Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

When should I expect to approve the returns

Reponse

Typically, Exactor will make tax returns available for your approval on the 5th day of a month. This will give you a few days at the beginning of the month to make updates in case you need to do so before the return is generated.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 16 of 49

Topic

Filing Tax Returns

Question

How do I file my tax return?

Reponse

Filing your tax returns is part of the fully automated, end-toend solution provided by Exactor. The filing process is managed entirely by Exactor (to the extent that you request us to do so.

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Every filing period, Exactor will generate the tax filing information, and make it available for you to review and approve. Once you approve the returns, Exactor will invoice and charge your account for the taxes owing. Upon receipt of the funds, and prior to the due date, Exactor will file all of the approved tax returns, and remit tax payments on behalf of the merchant. Where possible, Exactor performs the filing electronically and use electronic payment methods to remit tax payments. If unavailable, Exactor will. Otherwise, Exactor will generate and file the paper forms, then send in checks to cover payments. In no event will the customer be required to generate and file returns or cut and mail check on their own, unless they choose to do so. Of course, a client can choose to perform the entire process of filing returns manually or using an external system after downloading the month’s transaction and tax data from the Exactor reporting system (in which case, Exactor cannot be held responsible for the process); or else, a client may file manually after Exactor has generated the tax returns.

Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

Can I have 2 returns filed - one by Exactor for part of the business, and the other by myself, for the part of the business not covered by Exactor?

Reponse

Unfortunately no, states reqire that each company submit a single tax return.

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If you have part of your business not covered by Exactor, you will have to follow one of two options: (i) transfer to Exactor information about the non-Eactor covered part of the business so that Exactor can integrate this information, generate and file file a single return on your behalf; or (ii) do not use the Exactor filing services. In this case you willl need to download transaction data from Exactor and you will be responsible for generating and filing the tax returns.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 17 of 49

Topic

Filing Tax Returns

Question

How do I approve the tax return?

Reponse

In your Exactor admin report, please go to the "Filing" --> "State Filing Report" tab in your Exactor admin page. There you will see a summary of the month's activity (sales; exempt sales; taxes owing). If the numbers match, all you need to do is click the "Approve" button. This will change the status of the report to "Approved". Once approved, Exactor will take over from there - Exactor will issue an invoice within a few days of amounts owing; (ii) Exactor will transfer the invoiced funds from your account around the 13th or 14th; (iii) Exactor will file the tax return and transfer the tax payments to the state and local taxing agencies

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Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

What will happen if the amount needed to pay my taxes is not in my bank account when the service tries to collect

Reponse

Exactor WILL NOT FILE A RETURN IF ALL OF THE TAXES ARE NOT COLLECTIBLE FROM YOUR ACCOUNT IN A TIMELY MANNER.

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Exactor acts as your agent and representative. It cannot file a tax return without receiving the funds necessary make the tax pamentl. Exactor takes all steps to assure that funds are collected in a timely manner. If you fail to make the funds available, Exactor will not proceed with the filing. Exactor will not be responsible for any late fees and penalties that may accrue from a late filing that is a result of your failure to make funds available in a timely manner.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 18 of 49

Topic

Filing Tax Returns

Question

What do I do if after looking at the tax return I disagree with the amount owed for taxes? What is the correction process?

Reponse

If you disagree with the amount owing, you should click on the "Reject" (red) return button. An Exactor representative will contact you shortly to find out the reason, and to take corrective steps, if needed. Because of the very tight time frames within which Exactor operates to prepare your tax returns, invoices, generate and file tax returns, it is highly advisable that you contact an Exactor representative if you do not hear from them within 24 hours. This is important to make sure that we do not miss any filing deadlines.

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Key Words Level 2 Level 3 Topic

Filing Tax Returns

Question

How does using Exactor Services help me through an audit?

Reponse

The Exactor Suite provides a comprehensive, verifiable, transactional audit trail. We have found this to be an important (sometimes critical) and helpful tool for audit purposes. Exactor's systems, that have been certified by state taxing agencies, are accepted by state auditors as reliable and accurate tools for sales tax compliance. This enhances your credibility and arguments of a good faith reliance, all of which are critical to support your position in front of the state auditors. Exactor's comprehensive transaction trails, payment and remittance trails, all of which are readily available to you and your representatives at time of an audit, save you countless efforts and resources in recreating your transaction and filing history. The ability to quickly provide comprehensive and accurate responses to audit inquiries have proven time and time again to be critical support tools for audit purposes, oftentimes resolving audit questions quickly and satisfactorily.

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Tuesday, January 27, 2009

Page 19 of 49

Topic

Filing Tax Returns

Question

What does Exactor do to support me when a state starts auditing me?

Reponse

Once a notice of questions is received from the state (even before a formal audit is commenced), Exactor communicates with the states and the taxing agencies directly, and oftentimes brings the issue to final resolution, to the extent that the issue does not rise or escalate to the level of a formal audit.

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The moment that the level of inquiries reaches that of an audit, Exactor refers the matter to you , providing you andyour representative with all of the information, comprehensive audit trails of each transaction, detailed filing and tax payment historyy and any other report that you may need in support of your audit. Exactor has managed these processes without further client intervention in a vast majority of the matters. One point to note is that of audits under the SST - one of the benefits of using the Exactor CSP services is that the SST states have agreed that all audits are performed on the Exactor system, removing from you the burden of managing SST related audits.

Key Words Level 2 Level 3 Topic

General Questions

Question

What is Exactor?

Reponse

Exactor is a fully automated, reliable and accurate sales tax record keeping and tax processing system that is easy to use.

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Exactor’s ASP service is designed to provide management services, data storage and complete automation of the sales & use tax compliance process. This includes a comprehensive module designed to automate the process of creating, tracking & managing exemption information and exemption certificates. Exactor allows the merchant to focus on SALES, while Exactor deals with the TAX. It provides a comprehensive, endto-end compliance system for sales and use taxes owing in all commercial environments. Exactor's services were desgined by solution providers with strong technology backgrounds, to bring the highest level of tax compliance solutions to regular merchants who want to stay in control of their business and comply with tax rules.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 20 of 49

Topic

General Questions

Question

What is an ASP (Application Service Provider)?

Reponse

An application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software or software as a service (SaaS). The most limited sense of this business is that of providing access to a particular application program (such as customer relationship management) using a standard protocol such as HTTP.

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Exactor users the most advanced technologies to provide a sophisticated technology enabled financial service solution. By using these web based technologies, Exactor has developed a system where all the processing is performed on the Exactor system. What this means is savngs to you - you do not need to purchase an expensive software program to install on your system; you do not need to learn how to operate a sophisticated software; you do not need to worry about maintenance. What this means is that you receive the benefit of a sophisticated solution that Fortune 500 companies pay hundreds of thousands of dollars, without compromising on the quality of your service.

Key Words Level 2 Level 3 Topic

General Questions

Question

What services does EXACTOR Suite provide?

Reponse

The ASP-based services cover all elements of sales tax compliance: tax determination; full transaction life cycle tracking (including any changes made to a transaction, such as credits, product returns, or exemptions); providing a comprehensive, verifiable, transactional audit trail; managing exemption certificates; preparing and filing the tax returns; and transferring tax proceeds to the different tax agencies. All you need to do is manage your account, and review the returns before we file them for you.

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An additional benefit - because of the comprehensive Exactor tracking system, the Exactor reports can also be used as a solid support tool for sales and use audit purposes.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 21 of 49

Topic

General Questions

Question

What type of reports does Exactor provide?

Reponse

The Exactor reporting system provides real time reporting capabilities on all elements of transactions conducted using the Exactor system. The real time reports are available 24x7, and provide an accurate, timely report on the status of the merchants’ tax responsibility, and all of its elements.

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Reports include: transaction summaries and sales tax returns aggregated by states and local authorities, transaction counts of any given line item, details of committed transactions, all calculation requests aggregated by invoice, details of specific tax calculation requests, aggregated by states.

Key Words Level 2 Level 3 Topic

General Questions

Question

Is using your system safe? Secure?

Reponse

YES!!

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Exactor's systems were certified by the taxing authorities of the SST, Streamline Sales Tax body, which is an amalgamation of the sales tax deprtments within the Departments of Revenue of over 20 states. Certification required exhaustive system testing for accuracy, security and efficacy using standards as set by NIST, ISO17799 and SAS70. Certification was a very significant seal of approval, attesting to the accuracy, security and overall integrity of the underlying system. Certification covered all aspects of the business, including accuracy of calculations; security of the Exactor systems; scalability; safety; privacy and overall protection of the merchants and their data. SST certification is the highest level of independent seal of approval provided in the industry. All other methods of approval are subjective, and most ofter are paid for by the company being approved. SST certification exceeds this level of safety and assurance.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 22 of 49

Topic

General Questions

Question

Do I need to employ a tax professional to use EXACTOR?

Reponse

No. Exactor’s systems are easy to use, and does not require sophisticated knowhow. You do need to consult with a professional regarding some of the set-up items (such as where do you have nexus). However the actual set-up and operation of the system is easy, designed for the nonsophisticated user. As an ASP based system, you do not need to purchase buy, learn, integrate or maintain new software packages. You do not need to employ IT teams to work on custom installation.

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Using Exactor’s easy-to-use, intuitive on-line Merchant Administrator Site, you can manage your entire account and view transaction activity in real time. You can add users, restrict users, add products and locations and perform any administrative function in this readily accessible safe environment.

Key Words Level 2 Level 3 Topic

General Questions

Question

Once I set up my account, what additional work will I be required to perform?

Reponse

Once set-up, all that you will need to do is supervize, manage and review your returns. Exactor is designed to meet ALL of your sales tax compliance needs.

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The fully automated Exactor system reduces the risk of misplacing or forgetting about a specific transaction. The suite’s full integration into your accounting program means that all you need to do is enter the transaction into your transaction document (invoice, purchase order, credit memo, etc) , then click save as you would for any other book-keeping program. Exactor is designed so that you do not need to perform additional activities. It avoids rqeuiring you to enter any additiona key entries. Once you click "save" Exactor begins to work: your system connects to the Exactor service, which calculates the tax for the transaction and enters it into the invoice right before your very eyes. The data then gets stored on the central Exactor server (for reports and returns generation at a later date).

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 23 of 49

Topic

General Questions

Question

What additional work is required for my e-commerce shopping cart to run a transaction through Exactor?

Reponse

Exactor is a heaven send for e-commerce and transactions where geographic location is unlimited by physical accessibility. The Exactor e-commerce shopping-cart module is designed for those merchants that want to connect their ecommerce shopping carts to the Exactor system for calculating taxes in real time, so that taxes are included in the final transaction amount that is authorized by the customers, and so that transactions are included in final tax reports and returns.

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Typucally, the shopping cart will automatically connect to the Exactor system once the buyer completes fililing the shopping cart, and proceeds to checkout. The buyer does not need to perform any action. The connection to Exactor, calculating the taxes, and including in the final transaction amount are all automatic, andcompletely transparent to the buyer. This way, when the buyer approves the transaction, the approval already includes the taxes that will be used for generating your returns. They are not hit with taxes that are calculated after the fact.

Key Words Level 2 Level 3 Topic

General Questions

Question

Is using the Exactor service disruptive in any manner to my client?, to the purchase transaction?

Reponse

No. Quite the contrary. The buyer will not experience any kind of delay or other disruption of their purchasing experience. Neither the buyer nor the system operator need to perform any additional key input to perform the Exactor tax calculation and compliance function, and the entire calculation occurs within a few imperceptible seconds. They do not perceive any delay to the transaction flow.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 24 of 49

Topic

General Questions

Question

Why should I use your services? Wouldn't it be cheaper to just charge the highest tax rate in the state?

Reponse

There are some that think that it would be easier to simply charge the highest tax rate in the state, and that they can then avoid any liability for not collecting sales taxes. Following this advice would lull the merchant to face a rude awakening. First of all, customers that purchase goods from the merchant and who reside in lower tax rate county could have a legal cause of action against the merchant for overcharging taxes. The merchant would then face having to refund the difference from their own pocket, in addition to any other legal sanction that may be imposed on them. In addition, the issue that faces the merchant isn’t just in calculating and collecting the correct tax amount, but rather in the backend reporting. Any state where there are different tax rates for different localities (counties, cities, districts, etc), also has complex reporting requirements. The merchant must accurately report the taxes collected for each and every jurisdiction within the tax report. They expect the merchant to remit accurately, not less but also not more than what is required. Filling out the returns is a difficult task, which the Exactor service performs for you.

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Key Words Level 2 Level 3 Topic

General Questions

Question

Will someone hel;p me set up my Exactor Account?

Reponse

Yes! The integration experts at Exactor will be happy to walk you through the entire set up process. If needed, they will help you download a module plug-in for your accounting software or shopping cart, or will provide you with technical information your technical people might need for more customized set-up situations. We will do all that we can so that you quickly and successfully complete your set-up, confirguration and testing process successfully and proceed to production.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 25 of 49

Topic

General Questions

Question

How does Exactor make money?

Reponse

Exactor charges you for the services thatwe provide. Exactor does NOT charge anything for set up and integration. It is in our interest, as well as yours, that you set up your systems accurately and quickly. Providing you with assistancetup front reduces support issues that may arise later on.

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Key Words Level 2 Level 3 Topic

General Questions

Question

How can Exactor do it so inexpensively? Does this mean that I am receiving an inferior quality product that provided by your competition?

Reponse

No! Exactor's service is top of the market, and does not fall in quality or scope to those provided by any of the competitors (in fact, we strongly believe that the scope, robustness and qualirty of our service exceeds those of the competition). Exactor can offer the service at the price points we offer because of the high level of automation of our systems. The system, with all of its features and modules, were designed from the ground up, so that we do not need to bridge between different systems and components. As an ASP system, all the processing is performed on our system, which means that we avoid integration problems that you may face had we required you to install processing software on your systems. All of these features combine to reduce our overall costs, which we are glad to share with you, so that we develop a long lasting relationship and increase the marketablity of our service.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 26 of 49

Topic

General Questions

Question

Does Exactor support audit requests from the states?

Reponse

Exactor is the first line of support to the states for all clients, large or small.

101

When a notice is first received from the state, either directly to Exactor, or sometimes - it is forwarded directly to you (depending upon their internal policies, the states ma sometimes send notices to you, the tax payer), in which case you should forward to Exactor the notice assoon as possible. Once notice is received, Exactor communicates with the states and the taxing agencies directly, and brings these matters to final resolution, to the extent that the issue does not rise to the level of a formal audit. The moment that the level of inquiries reaches that of an audit, Exactor refers the matter to you , providing you with all of information, comprehensive audit trails of each transaction, and any other report that you may need in support of your audit. Exactor has managed these processes without further client intervention in a vast majority of the matters. One point to note is that of audits under the SST - one of the benefits of using the Exactor CSP services is that the SST states have agreed that all audits are performed on the Exactor system, removing from you the burden of managing SST related audits.

Key Words Level 2 Level 3 Topic

General Questions

Question

Is there any regulations that Sarbanes- Oxley imposes on Sales Tax collection, calculation or payment?

Reponse

Sarbanes-Oxley (SOX) does not come with a step by step guide for what each company needs to do; therefore, it is important that you speak with a tax professional regarding the Acts language as applied to your particular situation.

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The Exactor Suite does provide a comprehensive, verifiable, transactional audit trail. We have found this to be an important (sometimes critical) and helpful tool for audit purposes, and a strong support for SOX compliance. To the extent that a company has sales tax compliance issues intertwined with their SOX compliance certification (which oftentimes they are, such as transaction audit trails, payment and remittance trails, using a certified, accurate, reliable system that are compliant with State requirements), the Exactor system provides the support necessary for the SOX reporting requirements. .

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 27 of 49

Topic

General Questions

Question

What is nexus?

Reponse

Nexus is a legal term meaning the connection required to exist between a state and a potential taxpayer, such that the state has the constitutional right to impose a tax. Different state and federal courts have inconsistent definitions of what it means to have sufficient connection to the state to be subject to tax. Nexus is typically defined by physical presence, but may also be defined by business activity, affiliation, or other kinds of presence, such as sales people calling on customers in the state. Businesses may have an obligation to report sales or use tax based on nexus. You should consult with your accountant or attorney to determine where you may have nexus.

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Key Words Level 2 Level 3 Topic

General Questions

Question

Is "use tax" different than sales tax?

Reponse

Sales tax is a levy placed by states on goods or services purchased from a business that has nexus in the same state as the purchaser. "Use" tax is a compensating tax owed when retail sales tax was due, but was not paid at the time of sale. This can occur, for example, when items are purchased by mail or over the Internet and the out-of state business does not have nexus in the state. Use tax may also be owed by businesses that use items from inventory and do not pay the sales tax. Use tax is the customer's responsibility to pay, but increasingly is being collected by vendors on a customer's behalf.

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Key Words Level 2 Level 3 Topic

General Questions

Question

Is sales tax owed if a product is purchased through mailorder or on the Internet?

Reponse

When you purchase items on the Internet that are shipped to you in your state, the items you purchase are likely subject to sales (or use) tax. Some retailers who do not have a presence (nexus) in your state are not required to collect your state's sales tax. If you are not charged sales tax on your purchase, you likely owe use tax.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 28 of 49

Topic

General Questions

Question

I have heard that there are no taxes on purchases made over the Internet

Reponse

That is an inaccurate perception. The Internet Tax Freedom Act, originally passed by Congress in 1998, prohibits creating new taxes. For example, it bars taxes on Internet access services provided to end users, meaning taxes on the service of providing Internet access. The law also bars taxes on whatever an access provider reasonably bundles with access, including e-mail and digital subscriber line (DSL) services.

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The moratorium does not bar taxes on acquired services, such as high-speed communications capacity over fiber acquired by Internet service providers (ISP) and used to deliver Internet access. More specifically, the Act does not bar the enforcement of existing taxes. Because sales and use taxes existed before the Tax Freedom Act, states are permitted to enforce these taxes on transactions that were created over the Internet.

Key Words Level 2 Level 3 Topic

General Questions

Question

What is a resale certificate?

Reponse

One reason that a customer may have a personal exemption is that they are making thepurchase for purpose of reselling the product.

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To qualify for the personal exemption, they must provide you with a resale certificate. A resale certificate is a standard business form that is used by registered businesses making purchases of goods and certain services that they intend to resell in the normal course of business without intervening use. The use of a resale certificate allows for purchases without paying sales tax. A resale certificate is usually required for all wholesale sales, otherwise sales tax must be charged. The specific rules for use of resale certificates vary by state. The resale certificate must be listed in the Exactor exemption module to quality the sale for taxexempt status.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 29 of 49

Topic

General Questions

Question

How likely is it that I will be audited?

Reponse

Since sales and use taxes are such a large piece of state revenue, states are becoming more aggressive and have begun increased audit activity. States use several sources in selecting businesses for an audit, including Internal Revenue Service information, information-sharing programs with other states or other intra-state agencies, computer-based random selection, state department of revenue database information, and business publications, periodicals, journals and directories. The average company faces an audit every seven years, based on studies of state audits.

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Key Words Level 2 Level 3 Topic

General Questions

Question

What are the penalties if I am found to be delinquent in my sales taxes?

Reponse

Penalties vary by state. Most states charge penalties and interest for late payments, underpayments, or not filing. States can also revoke a business license, shut down a business, and issue tax warrants for a business owner's arrest.

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Key Words Level 2 Level 3 Topic

General Questions

Question

What is a billable transaction?

Reponse

For determining billable tiers, Exactor looks at the average number of transactions that you conduct on an annual basis. For this purpose, a transaction would be a committed invoice that you commit to the Exactor system, which is later used for calculating taxes owing and generating your tax return. An invoice would be an invoice that you submit to your customers for billing purposes.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 30 of 49

Topic

Product Mapping

Question

If all my products are the same type, can we put in a wild card or a master sku number?

Reponse

Exactor does not replace your inventory control. You can use any identifier you want to pass in to the Exactor Service. You can even keep the product identifier blank. In this case, Exactor will err on the side of being cautious, and will always consider the product to be taxable at the highest local rate. If you want to benefit from possible product specific tax holidays or reduced tax rates, you should map your products to the corresponding Exactor EUC code.

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Key Words Level 2 Level 3 Topic

Product Mapping

Question

I think some states tax shipping and handling and some don't. What "SKU" number should we enter for shipping and for handling.

Reponse

You should find the Exactor EUC that best matches the type of S&H that you use (for example, common carrier; contract carrier; using your own vehicle; mandatory or optional combined shipping and handling; etc). This will make sure that your S&H charges are taxed correctly according to the different rules of each state.

60

Exactor has sophisticated logic that performs many tasks before looking up the tax rate. Amongst these are looking and applying the correct tax rules to the type of S&H that you are using. Exactor does not apply a generic rule to S&H, because that would lead to inaccurate results. Shipping and handling may be exempt from taxes, but often times they are taxable. Many times taxability will be determined by the state dependig upon the answer to questions such as (i) where does title pass to the buyer: and (ii) are the handling and shipping epenses combined in the invoice, or stated seperately. Exactor treats S&H like any other line item, and determines taxes owing depending upon (i) the type of S&H service; (ii) which carrier is used; and (iii) the state rules governing the transaction. Like any other product, different states have different rules for S&H. What makes it even more complicated is that different types of S&H may receive different treatment even within the state. This is the reason that Exactor looks at the type of S&H you use, and applies the rules of the state that govern that specific type of shipping and handling.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 31 of 49

Topic

Product Mapping

Question

Why do I need to map my products?

Reponse

Every state has different tax rules for different products, what is also referred to as product taxability. In order to apply the rules correctly, the Exactor system needs to know what you are selling, and the more accurate the information you provide, the higher the chances that we will be able to identify specific product exemptions and rules. If you provide high-level, more generic, descriptions only, Exactor will apply general taxability rules.

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First, though, you need to 'map' your products to the Exactor product codes, Exactor Unified Code ("EUC"). This action is performed only once, and then our system will automatically know which taxability rules to apply to each line item in your invoices. You don’t need to learn these numbers or apply them manually. Once mapped, simply continue to use your own SKU codes, and the Exactor system will take care of all of the rest. Afterwards, you may access the Product Mapping page and update it at any point of time in the future.

Key Words Level 2 Level 3 Topic

Product Mapping

Question

What happens if I cannot map my products? If Exactor does not have a matching EUC code?

Reponse

If you find that a certain product cannot be mapped into any of the provided EUC codes, contact your Exactor admin so that an EUC code can be added accordingly. To the extent that the merchant does not provide product mapping at all, the Exactor System will assume that the underlying transaction is taxable, and that no exemptions apply. It is important to note that the EUC system is not an inventory system – you do not need to map each and every sku item you have. Rather, you can achieve the desired result by assigning a sku range or group of skus to any given EUC code. Using a hierarchical approach, like-groups can be grouped into a common class of a higher level group. The Exactor mapping schema provides multiple levels of hierarchies. You will need to drill down the hierarchies to the level where you will see the corresponding EUC code, and a place to insert your matching SKU ranges."

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 32 of 49

Topic

Shopping Cart

Question

My shopping cart is not calculatng taxes

Reponse

For security purposes, Exactor requires that each transaction requirs a valid Exactor issued Marchant ID (numeric); and a valid user name.

76

You should check that the Merchant ID issued byExactor is being used in the shopping cart code; and that the correct user name is also being used. You can verify the user name in your Exactor admin account, in the "Manage Users" tab. Make sure that spelling is identical (the system is also case sensitive) For more information, you should consult the User Guide

Key Words Level 2 Level 3 Topic

Shopping Cart

Question

What additional work is required for my e-commerce shopping cart to run a transaction through Exactor?

Reponse

Exactor is a heaven send for e-commerce and transactions where geographic location is unlimited by physical accessibility. The Exactor e-commerce shopping-cart module is designed for those merchants that want to connect their ecommerce shopping carts to the Exactor system for calculating taxes in real time, so that taxes are included in the final transaction amount that is authorized by the customers, and so that transactions are included in final tax reports and returns.

90

Typucally, the shopping cart will automatically connect to the Exactor system once the buyer completes fililing the shopping cart, and proceeds to checkout. The buyer does not need to perform any action. The connection to Exactor, calculating the taxes, and including in the final transaction amount are all automatic, andcompletely transparent to the buyer. This way, when the buyer approves the transaction, the approval already includes the taxes that will be used for generating your returns. They are not hit with taxes that are calculated after the fact.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 33 of 49

Topic

Shopping Cart

Question

Can I download transactions from my shopping cart to my accounting program?

Reponse

Yes. Exactor's plug-ins allow you to upload transactions from the Exactor admin site directly into your QuickBooks program. What this means is that transactions that were inputted straight into your Exactor admin site, or transactions that originated from another source, such as your shopping cart, and were run through the Exactor system for calculation purposes (regardless whether or not sales taxes applied), can be downloaded in their entirety into QB, thus effectively bridging between your e-commerce shopping cart and your QB system.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

I mistakenly used the wrong FEIN when I registered with SST. How do I fix it?

Reponse

A seller cannot change the FEIN or Social Security fields once they have registered with SST. If you need to fix an FEIN you should notify your Exactor rep, who will coordinate the change with the SST Administrator.

21

If a seller wants to change the ownership they must cancel the current registration and apply for a new SST ID.

Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

Does registering with SST mean thatwe do not need to file "Use" taxes any more?

Reponse

Exactor cannot provide you with any legal or tax advise. You will need to consult with your tax consultant to get the answer to this question. Rest assured though that Exactor can help you with your Use tax filings as well as your sales tax returns.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 34 of 49

Topic

SST, Streamline Sales Tax

Question

Does Exactor file and pay taxes only in SST states?

Reponse

NO!!!! Exactor files returns and pays your sales tax obligations in ALL jurisdictions in the United States, on the state, county, local and special district levels.

31

Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What is a NAICS code?

Reponse

Exactor uses this code to identify your type of industry. This may sometimes effect your tax filing.

34

The North American Industry Classification System (NAICS) is a unique 6 digit system for classifying business establishments according to their primary industrial activity. Please choose the 6-digit code that most closely identifies the seller’s primary business activity. The following web link may be used to look up a NAICS code. http://www.census.gov/epcd/www/naics.html

Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What is SST

Reponse

The Streamline Sales Tax is an initiative undertaken by many states for the purpose of trying to reduce the administrative work and expense businesses incur administering state and local sales tax. There are many things being done by the states to reduce the work and expense, including standardizing definitions, utilizing common forms and procedures, the certification of sales tax administration software for businesses use, and the use of a centralized web service to allow businesses to register for sales tax collection purposes.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 35 of 49

Topic

SST, Streamline Sales Tax

Question

What is the purpose of the Streamlined Sales and Use Tax Agreement?

Reponse

The purpose of the Agreement is to provide a road map for states who want to simplify and modernize sales and use tax administration in the member states in order to substantially reduce the burden of tax compliance. The Agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce. through all of the following: A. State level administration of sales and use tax collections. B. Uniformity in the state and local tax bases. C. Uniformity of major tax base definitions. D. Central, electronic registration system for all member states. E. Simplification of state and local tax rates. F. Uniform sourcing rules for all taxable transactions. G. Simplified administration of exemptions. H. Simplified tax returns. I. Simplification of tax remittances.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What does it mean to register under the Streamlined Sales & Use Tax Agreement?

Reponse

This system is a quick and easy way for sellers to register and update sales and use tax information for all member states at one time and place. The use of this system will register a seller in each of the member states. Once registered the seller must collect and remit sales and use taxes for all taxable sales into the member states.

37

Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

How Do I Register with SST

Reponse

Your Exactor customer rep will be happy to register you with SST and all Member States. If you decide to register on your own, you may do so by going to the following web site: https://www.sstregister.org/sellers/Register.aspx

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Don't forget to list Exactor as your technology CSP provider, and to provide Exactor with your SST registration information

Key Words Level 2 Level 3 Tuesday, January 27, 2009

Page 36 of 49

Topic

SST, Streamline Sales Tax

Question

May I Use the Centralized Registration System if I am already registered in a member State?

Reponse

Yes. A seller already registered in a member or associate states may still use the registration system. Choosing “already registered on the registration form will inform those states that a seller is “already registered. States will not issue a duplicate registration, but will just add the Streamlined Sales Tax ID to the current registration.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What are the benefits of registering under the Agreement?

Reponse

* An amnesty, subject to limitations, for a limited time.

40

* The ability to use certified sales tax administration software, the cost of which states may subsidize for certain sellers. * One identification number to be used to file and pay taxes for the registered states. * The ability to update registration data with all registered states at one time and place. * Sellers gain the ability to update registration data with all member and associate member states at one time and place

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 37 of 49

Topic

SST, Streamline Sales Tax

Question

What is a CSP (Certified Service Provider)?

Reponse

An important and new component of the Streamline initiative is the certification of sales tax administration software for business use. A CSP is designed to allow a business to outsource its entire sales tax administration function. The following is the definition of a CSP from the Streamlined Sales and Use Tax Agreement (SSUTA): An agent certified under the Agreement to perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases. The software system of a CSP knows what products and services are taxable, knows the tax rate at which they are taxable, can interface with your accounting system, and will file the tax return and pay the tax on your behalf. Each state that is a member of the Streamline initiative has evaluated the accuracy of the tax decisions and is willing to stand by the accuracy of the decisions they have evaluated.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What is the definition of a volunteer seller?

Reponse

The following is the definition of a Volunteer seller for purposes of Certified Service Provider (CSP): Volunteer Seller in a Member State or Associate Member State means a Seller that has registered pursuant to Article IV of the Streamlined Sales & Use Tax Agreement through the Central Registration System and:

42

* Represented in its registration that it did not have a legal requirement to register and in fact did not have a requirement to register in the Member State or Associate Member State at the time of registration, regardless of any previous registration the Seller may have made in the Member State or Associate Member State; or * For Sellers who registered with the Member State or Associate Member State after November 12, 2002 , the Seller meets all of the following criteria during the twelve (12) month period immediately preceding the date of registration with the Member State or Associate Member State : o No fixed place of business for more than thirty (30) days in the Member State; o less than $50,000 of Property in the Member State; o less than $50,000 of Payroll in the Member State; and o less than twenty-five percent (25%) of its total Property or total Payroll in the Member State.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 38 of 49

Topic

SST, Streamline Sales Tax

Question

Is there a fee to register under the Agreement?

Reponse

There are no fees or other charges for a seller to register in a state in which the seller has no legal requirement to register. There may be a fee assessed by some states if the seller has a legal requirement to register.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

May I use the SST registration even if I have a legal obligation to register in a state?

Reponse

Any seller that wants or needs to register in all the member states may use the registration system. A seller that has a legal obligation to register in a state will also need to contact those states for further sales tax licensing requirements.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

If my company is already registered in some of the member states how will this affect my Streamlined registration?

Reponse

There is a place on the registration form to list if you are already registered in a state. In this case most states will not issue a duplicate registration, but will just add the Streamlined Sales Tax ID to the current registration.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 39 of 49

Topic

SST, Streamline Sales Tax

Question

What do I do if I registered mistakenly with Streamlined, or I no longer want to participate?

Reponse

A seller may cancel their registration through the registration system. Go to www.sstregister.org/sellers and click on Update Registration. At this point you will need your SST ID and password to continue. Click on Change Registration Status, and follow the instructions to cancel your registration. If a seller collected tax for member or associate states during the time they were registered, they are required to remit the tax to the state(s). A seller should consult with the state or their attorney or accountant before they cancel their registration in any state where they have a legal obligation to register to determine the requirements for remaining registered with that state. Any seller who received an amnesty from any Streamline state will lose that amnesty if they cancel their registration within 36 months of registration. They will also lose their amnesty if they cancel in any full member state during the 36 month collection requirement. Any seller that wants to register after having canceled their registration must complete a new registration and receive a new SST ID.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

I registered with Streamlined and am now registered in more states than I want. May I cancel in the states in which I do no business?

Reponse

A seller must remain registered with all of the member states, or cancel with all of the member states. If a seller wants to register with only a few states they should not use the Streamline registration system. Amnesty is not available in any state unless a seller is registered with all of the full member states.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

My company went out of business. If I cancel will I lose my amnesty?

Reponse

If a seller goes out of existence and has paid all of the taxes due, they will not lose the amnesty when they cancel their registration.

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Page 40 of 49

Topic

SST, Streamline Sales Tax

Question

What are the requirements for filing returns?

Reponse

You do not need to worry about filing requirements. Exactor will file all of your Sales tax returns.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

How are tax payments handled?

Reponse

As part of the Exactor services, Exactor will handle the payment of all your tax obligations.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

Are sellers issued an SST ID number for each state?

Reponse

Once the registration process is complete, you will receive a single unique Streamlined Sales Tax ID number which will be used as your tax ID in ALL Member states. The SST ID is the seller’s registration number and is to be used for communication with the states or the Streamlined Administrator. Some states may send you additional tax IDs for that state, which you should retain in your records.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What is the SST Beginning Effective Date?

Reponse

This is the date that the seller will begin collecting tax for each state in which they were not previously registered. The date cannot be more than 30 days following registration with the SST. Requests for extensions may be filed.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 41 of 49

Topic

SST, Streamline Sales Tax

Question

What if a seller registered and used the wrong effective date? The company will not be ready to begin collecting in each state by the effective date that they submitted?

Reponse

If a company is not ready to begin collecting tax by the beginning effective date the seller needs to cancel their registration and reapply when they are ready. The seller can request an extension of the effective date.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What is Indicate Seller Registry Status?

Reponse

This is the place where you indicate the states where you want to register for sales tax collection purposes or indicate which states you are already registered.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

What does it mean if I select a state to register to start collecting sales tax?

Reponse

In this column select each state where you are not already registered to collect sales taxes.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

I got a confirmation number when I updated my information. Will I use that number if I need to update again?

Reponse

A confirmation is provided each time a registration change is submitted. It should be retained as proof that registration data was submitted, but does not need to be provided for subsequent registration updates.

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Tuesday, January 27, 2009

Page 42 of 49

Topic

SST, Streamline Sales Tax

Question

What does it mean if I select a state where I am already registered to collect sales tax?

Reponse

All states will provide all sellers with information about how to properly report and file the sales or use tax that you collect. The purpose of this question is to allow the seller to determine if the seller wants to receive information from a state about other state tax obligations. Some states have additional tax obligations that sellers need to understand when conducting business in those states. In addition, the Streamlined Sales and Use Tax Agreement makes a distinction between a seller that "has no legal requirement to register" in a state and those that do. Specifically, if a seller does not have a legal requirement to register, the seller cannot be charged a registration fee by the state (SSUTA Section 303 (B)), they can file their returns less frequently under certain circumstances (SSUTA Section 318 (D)), and they can complete their registration using this online registration process and not be required to provide the state with any additional information (SSUTA Section 401 (C)). A “legal requirement to register” is determined by the laws of each individual state and generally involves the degree to which you may have a physical presence in that state. If you choose to receive such information from a state, that state will contact you and provide you with information about fully registering in that state. The state may also provide you with information about other tax and licensing obligations you may have. If you use an address in a state, that state may contact you about possible registration requirements you may have. A seller’s legal obligation to register in a state does not impact the amnesty that may be available to the seller. A seller that registers through this system is still eligible for amnesty in all of the member states and associate member states (for which they elect to begin collecting sales tax) regardless of how they choose to register.

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Key Words Level 2 Level 3 Topic

SST, Streamline Sales Tax

Question

The company originally registered has been acquired and the contact person is no longer with the company. How do I change the contact information and email address?

Reponse

Your Exactor rep will be happy to provide you with this service. Alternatively, you can go to www.sstregister.org/sellers and click on Update Registration. Select Update Business/Contact Info to make any changes to the contact information and email address.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 43 of 49

Topic

SST, Streamline Sales Tax

Question

We were registered with one of the SST states before we registerd with Streamline. What will happen with our registration? Do we need to file 2 returns?

Reponse

No, you do not need to file two returns. The SSTregistration should replace your existing state registration. The state should cross-reference your existing state registration with the new SST ID number. All filings in SST states will be done under the new SST ID number.

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With that being said, we highly recommend that you contact the state and make sure that they either (i) cross referenced the old registration with the new SST ID; or (ii) cancelled out the old registration. If they don't there is a risk that the states will issue a notice of delinquency for failure to file a return under the old registration number. The matter will eventually be cleared up, but by contacting the state earlier on you can save yourself many headaches later on.

Key Words Level 2 Level 3 Topic

State Registration

Question

Must I register with the states?

Reponse

Yes. Unfortunately, states do not accept tax returns unless you are registered with the state, and have included your state registration number with the return.

14

But don't think that not having a registration is an excuse for not filing - states will impose fines and penalties for failure to file tax returns in a timely manner, even if your reason was that you did not have a tax ID. Therefore you should register with any state that you think you will have an obligation to file (nexus) as soon as possible, and provide Exactor with the tax ID that was issued to you.

Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 44 of 49

Topic

State Registration

Question

Will Exactor register me with all states?

Reponse

Exactor can provide services to register your business with the SST states only under the SST register. Exactor cannot provide however registration services that is not performed via the SST register, and in non-SST states and local jurisdictions. Exactor will be happy to provide assistance, such as points of referral, where to register.

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In case you wonder why - the sales tax registration process requires detailed and specific knowledge of the business, which Exactor may not have. We prefer to leave this task to you to make sure it is done correctly, accounting for those elements that are unique to your business.

Key Words Level 2 Level 3 Topic

State Registration

Question

Must I register in all States? In which states must I register?

Reponse

You should register only in those states that you have an obligation to register or where you want to file returns. Exactor does not provide any advice, legal or tax, to merchants, including advise about where they need to register. You should consult with your attorneys and consultants to make this determination. Exactor merely provides a tool to automate processes that they need to otherwise perform by themselves. You do not have to register in all states to benefit from our services. Exactor will provide services (calculation, generating and filing the returns and making the payments) only in those states where you wants us to.

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Key Words Level 2 Level 3 Topic

State Registration

Question

What will be mailed to the mailing address?

Reponse

Welcome letters, registration packets, bills, refunds and other correspondence from each state will be mailed to the mailing address.

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Tuesday, January 27, 2009

Page 45 of 49

Topic

State Registration

Question

Do I need to provide Exactor with State Tax ID numbers (other than SST IDs)

Reponse

Yes. Unfortunately, Exactor cannot file tax returns on your behalf without Tax IDs for each state. Registration requires knowledge of information that is specific to your company, which Exactor will typically not have (with the exception of SST states, where Exactor can perform the registration on your behalf). We therefore cannot perform this function on your behalf. Your Exactor rep will be happy to provide you with information, URLs and web sites where you can register with each state. Once you provide Exactor with your tax ID, we will be able to start filing tax returns on your behalf.

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Key Words Level 2 Level 3 Topic

State Registration

Question

Does Exactor file and pay taxes only in SST states?

Reponse

NO!!!! Exactor files returns and pays your sales tax obligations in ALL jurisdictions in the United States, on the state, county, local and special district levels.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 46 of 49

Topic

Taxes, Collecting and Paying

Question

What is the tax credit that is available by the state of Washington?

Reponse

To help retailers transition to destination-based sales tax, the state of Washington is providing to small retailers up to a $1,000 tax credit, to offset any necessary changes to their accounting, point-of-sale, or other systems, or two years of assistance from a certified service provider (CSP). As a CSP, using the Exactor services will make you eligible for this credit. The credit is available on the excise tax return, beginning with the July 2008 return.

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You are are eligible for this credit if you meet all of the following requirements: 1. Gross less than $500,000 in Washington sales annually; 2. Receive at least five percent of your taxable sales income from delivering the products you sell (compared to over the counter sales that occur in your premises); and 3. Receive at least one percent of your taxable sales income from delivering products outside the jurisdiction where you are located (for example to a different county, different state).

Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

How do I register for the Washington Credit?

Reponse

You do not need to make any special registration to be eligible for the Washington tax credit. All you will need to do is maintain documentation to support your claim for eligibility, and take the credit on your tax returns.

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Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

How does Exactor collect tax payments?

Reponse

Exactor uses advanced, modern, secure methods for collecting your tax payments and remitting them to the states. Exactor maximizes the use of electronic fund transfer methods, typically known as ACH Debit, which provides secure tracking of the transfer of funds, and minimal time that funds spend en route between the different accounts. This translates into collecting the funds as late as possible, while assuring that taxes will be paid in a timely manner.

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Key Words Level 2 Level 3 Tuesday, January 27, 2009

Page 47 of 49

Topic

Taxes, Collecting and Paying

Question

What is ACH?

Reponse

The ACH Network is a highly reliable and efficient network for the transfer of funds electronically and automatically. The system is governed by the NACHA OPERATING RULES which provide for the clearing of funds between all banking institutions. The method is safe and secure. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH entries.

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Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

What is ACH Debit

Reponse

With ACH Debit, Exactor is authorized by you to send payment information through the secure network to your banking institution. Your bank will then transfer the funds directly from your account to that of Exactor. The ACH Debit method allows Exactor to perform the fund transfer component of your tax compliance automatically, quickly and efficiently, assuring that your funds are collected as late as possible and still be transferred on time to the state tax collecting agency.

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Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

What is the Process for the ACH Debit

Reponse

You receive an invoice for amounts owing. Invoices are typically generated by the 10th day of the month, and transmitted to you electronically. The cover mail will typically advise you when the fund transfer process will be initiated, typically around the 12th or 13th day of the month. On the due date, Exactor initiates the fund transfer process by sending payment instructions through its bank to yours. Within 24 hours of this time, you should see in your account the debit from your account of the amounts owing.

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Key Words Level 2 Level 3

Tuesday, January 27, 2009

Page 48 of 49

Topic

Taxes, Collecting and Paying

Question

How does Exactor remit tax payments?

Reponse

To the extent possible, Exactor uses the same electronic methods of paying the taxes as used when collecting payments from your account. In other words, where possible, Exactor remits payment to the taxing agencies using ACH Debit. However, not all taxing agencies accept e-filing and ACH Debit, and in those situations, Exactor will generate a hard-copy return, will cut a check, and mail it to the state. You do not incur any additional cost for these situations.

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Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

Why does Exactor collect my bank account information

Reponse

Exactor must collect your bank account information in order to enable the ACH Debit process. Without your bank account information, Exactor will not be able to initiate the automated electronic transfer of funds, slowing down the process, and increasing the risk that your taxes will not be paid in a timely manner.

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Key Words Level 2 Level 3 Topic

Taxes, Collecting and Paying

Question

Why does Exactor debit my bank account electronically?

Reponse

Our system is designed around automation of the processes, with minimal human intervention, which allows us to keep the costs down. This also allows us to turn processing of tax returns within the few das that we have between when tax returns are available for approval and filing of the returns with payment. We cannot be in a situation that tax payments are reversed by the customers because, as you can imagine, that would require higher levels of manual intervention, increase the cost, and probably result in missed filing deadlines.

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Tuesday, January 27, 2009

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