US Taxation: Criteria to be a Volunteer Seller

Janhavi Wagh -

To be qualified as a volunteer seller, your business will have to meet all the requirements during the 12 months before the date of registration with the member state, as mentioned below:

  • less than $50,000 of property in that state
  • less than $50,000 of payroll in that state
  • more than 30 days without any fixed place of business in that state
  • total Payroll or total Property is less than 25% as stated in that state
  • not collecting sales or use tax in the Streamlined State
  • not required to register and collect sales or use tax in that state as per statutory requirement.

If the seller no longer meets all of the above criteria in that state, they will eventually lose their ‘volunteer seller’ status in a Streamlined state.

A seller who fulfills all the criteria above and they are legally obligated to register in a Streamlined State is a ‘Volunteer Seller’ in that state.

A business owner who has economic nexus in a state does not have to worry that they will be disqualified from acquiring the volunteer status.

There must be some reasons why business owners aspire to be a volunteer seller. One of the apparent reasons is that a business owner can obtain a Certified Service Provider (CSP) at zero cost. The state will compensate the CSP to provide software and services needed to set up and integrate Certified Automated System (CAS) in their system, prepare and file required returns, calculate the tax due, remit tax due, and many more.

Also, business owners that register as SST Volunteer Seller gained several benefits such as:

  • Audit protection in participating states
  • No monthly filing fees in participating states
  • No calculation fees in participating states
  • No SST registration fees in participating states

If you have no knowledge and expertise of the tax system in the US, it will be beneficial that you outsource your sales tax management to a Certified Service Provider (CSP). A Certified Service Provider will have the tax system and facility to automate your data, determine if you have sales tax nexus, and assess your responsibility to collect, file, and remit sales tax to audit support.