With the changes to how sales tax applies to TTISI, here are the answers to the most commonly received questions.
Why is TTI Success Insights collecting sales tax starting January 1, 2021?
In which states does TTI Success Insights currently have Economic Nexus?
I don’t charge my clients sales tax. Since I don’t, why does TTI Success Insights need to charge me sales tax?
Once I have a Sales Tax license, how hard is it to cancel?
If I work with a non-profit organization, does this impact the way TTI would charge me sales tax?
Will TTI Success Insights take care of the sales tax fees for my clients?
What is the difference between a resale certificate vs exemption certificate?
Can I just send TTI Success Insights a scan of my sales tax license?
What happens if I do not submit any information?
What products or services are included in each category?
My state currently does not tax Information Services products (i.e. IDS reports). Do I still need to do something?
Do I need to submit a certificate for every state that my clients are in?
Does TTI Success Insights sell to VAAs or sublicense to VAAs?
Are complimentary reports taxable products?
Why is TTI Success Insights collecting sales tax starting January 1, 2021?
A business’ responsibility for collecting sales tax in a specific state is based on a concept called economic nexus (henceforth called nexus). Until recently a business was considered to have nexus only in states where the business had a substantial physical presence. On June 21, 2018 the United States Supreme Court, in “South Dakota vs Wayfair,” eliminated the physical presence rule as the only criteria in determining nexus. The new criteria are based on the number of transactions and the dollar amount of those transactions within that state. There is no specific shared definition of nexus across the 50 states. Moreover, definitions and rules for determining nexus change constantly and most states are careful to give themselves room to maneuver in their definitions.
Under the new rules, TTI Success Insights has determined that it currently has nexus in several states besides Arizona and is required to follow the rules of each state in which it has nexus. As states lower the threshold for determining nexus and sales in specific states increase, you can expect TTI Success Insights to increase the number of states in which it will collect sales tax.
In which states does TTI Success Insights currently have economic nexus?
TTI Success Insights meets the requirements for economic nexus in 23 states. They are as follows: Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington, and Wisconsin. For more information on state taxation, see the “Taxable Products / Services” in the Knowledge Base article.
I don’t charge my clients sales tax. Since I don’t, why does TTI Success Insights need to charge me sales tax?
TTI Success Insights, as the seller, has a relationship with you, the Value Added Associate. TTI Success Insights does not have a relationship with your clients. As such, TTI Success Insights is responsible for taxing VAAs in the appropriate states for products that are taxable in that state.
Once I have a sales tax license, how hard is it to cancel?
In most states, it is very simple to cancel a sales tax license. Examples include:
- Cancel online
- Submit your last sales tax return with the “Final Return (Cancel License)” box checked.
- Submit a specific form available online.
- Return the actual sales tax license to the appropriate agency with the word “Cancel” written across the front.
If I work with a non-profit organization, does this impact the way TTI would charge me sales tax?
No, TTI Success Insights would charge you sales tax at the same rate as someone who does not work with a non-profit organization. The relationship between you and your client is separate and distinct from the relationship between TTI Success Insights and you.
Will TTI Success Insights take care of the sales tax fees for my clients?
No, you as a Value Added Associate would be considered a reseller and are responsible for any taxes applicable on sales between you and your clients.
What is the difference between a resale certificate vs exemption certificate?
A resale certificate is a form, provided by the state, signed by the purchaser (VAA), that indicates that the purchaser intends to resell the products purchased from TTI Success Insights. This is separate and distinct from an exemption certificate which is a form presented by an exempt organization (i.e. a charity or church) to the seller when making a tax-exempt purchase.
Can I just send TTI Success Insights a scan of my sales tax license?
Unfortunately, no you cannot send TTI Success Insights a scan of your sales tax license. TTI Success Insights is using Avalara CertCapture to obtain a valid exemption/resale certificate from you and keep it on file. You will be able to submit information about your sales tax license and exemption status through Avalara CertCapture’s website and should not submit your actual sales tax license.
What happens if I do not submit any information?
If you do not submit any information and you are located in one of the 23 states TTI Success Insights currently has nexus, you would be taxed on any TTI SI products that are deemed taxable by your state. See the chart titled “Taxable Products/Services” in the Knowledge Base article.
What products or services are included in each category?
Currently, the products or services that are taxable include:
- Information Services includes all IDS assessments and reports.
- Online Training includes all LEARN courses and any trainings that are held virtually.
- Training and Seminars includes any in-person certifications, trainings, or seminars.
- Tangible goods includes any hard goods available through TTI Success Insights’ store like DISC cubes, posters, training aides, etc.
My state currently does not tax Information Services products (i.e. IDS reports). Do I still need to do something?
If you reside in one of the states that does not tax Information Services, you do not need to do anything and would not be charged sales tax by TTI Success Insights on IDS reports. However, if you purchase any tangible products from TTI SI, you would be charged sales tax on just those items. Be sure to check the Taxable/Exempt status on the Learn products. See the chart titled “Taxable Products/Services” in the Knowledge Base article.
Do I need to submit a certificate for every state that my clients are in?
You only need certificates on file with TTI Success for the state(s) in which you are either billed or the product is shipped to you.
Does TTI Success Insights sell to VAAs or sublicense to VAAs?
TTI Success Insights sells assessments to VAAs.
Are complimentary reports taxable products?
Yes, complimentary reports are considered Information Services with the tax code SI010004 and are currently taxable in some states. For more information, see the Knowledge Base article.
Purchasing Products in Learn
Our Learn Platform factors in taxes as well for applicable purchases. If you are in one of the non-applicable states, you will need to verify your address during the checkout process to remove the charges. See this article regarding The Prioritized Leader products for more details.
If you have any questions, or if something does not work, please reach out to our Partner Support Team member by clicking the chat button in the lower right corner, or call us at (800) 869-6908. We will be happy to help.