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Government Demands More Transparency of Use Tax Liabilities

As capturing use tax liability has become increasingly important, states and local regimes have begun initiating certain requirements on the reporting of taxable transactions. Many city governments are also attempting to find out more about purchasers’ use tax liability.

According to an article posted on Bloomberg BNA, “Several states have advanced bills imposing notification and reporting requirements on out-of-state sellers during the most recent legislative session, perhaps as a result of the Supreme Court declining to hear the Direct Marketing Association’s appeal in December 2016. States with pending notification and reporting requirement bills include Arkansas, Georgia, Kansas, Hawaii, Nebraska and Utah.”

There are also states that are considering unstandardized regulations and bills. For instance, Pennsylvania is considering a bill that requires sellers to notify customers that they may owe use tax but, unlike many states, it does not require sellers to report the total amount of the consumer’s purchase.

From a consumer’s perspective, it is important to know that these rules only require sellers to report the dollar amount of sales made. Specific details of purchased items will not be disclosed.

Will these new notification and reporting requirements be considered constitutional and, if so, will they actually compel sellers to collect and remit taxes?

About Vertex SMB

Vertex SMB provides a cloud-based sales and use tax solution for calculation and remittance, designed for small to medium-sized businesses operating in 2 or more states. See what our customers have to say about how Vertex SMB can be your solution for sales and use tax automation.

Image courtesy of JanPietruszka at

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