FAQ - Sales Tax Managment Software

8/14/2019 FAQ - Sales Tax Managment Software

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Exactor Frequently Asked Questions (FAQs)

Topic Accounting Software 77

Question My accounting software is not calculatng taxes

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

You should check that the Merchant ID issued byExactor isbeing used in the accounting software and that the correctuser name is also being used. You can verify the user namein your Exactor admin account, in the "Manage Users" tab.Make sure that spelling is identical (the system is also casesensitive)

For more information, you should consult the User Guide

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Question Once I set up my account, what additional work will I berequired to perform?

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

The fully automated Exactor system reduces the risk of

misplacing or forgetting about a specific transaction. Thesuites full integration into your accounting program means thatall you need to do is enter the transaction into yourtransaction document (invoice, purchase order, credit memo,etc) , then click save as you would for any other book-keepingprogram. Exactor is designed so that you do not need toperform additional activities. It avoids rqeuiring you to enterany additiona key entries.

Once you click "save" Exactor begins to work: your systemconnects to the Exactor service, which calculates the tax forthe transaction and enters it into the invoice right before yourvery eyes. The data then gets stored on the central Exactorserver (for reports and returns generation at a later date).

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Question Can I download transactions from my shopping cart to myaccounting program?

Reponse Yes. Exactor's plug-ins allow you to upload transactions fromthe Exactor admin site directly into your QuickBooks program.

What this means is that transactions that were inputtedstraight into your Exactor admin site, or transactions thatoriginated from another source, such as your shopping cart,and were run through the Exactor system for calculationpurposes (regardless whether or not sales taxes applied), canbe downloaded in their entirety into QB, thus effectivelybridging between your e-commerce shopping cart and yourQB system.

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Topic Calculating Taxes11

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

Reponse Exactor has sophisticated logic that performs many tasksbefore looking up the tax rate. Amongst these are looking andapplying the correct tax rules to the type of S&H that you areusing. Exactor does not apply a generic rule to S&H, becausethat would lead to inaccurate results.

Shipping and handling may be exempt from taxes, but oftentimes they are taxable. Many times taxability will bedetermined by the state dependig upon the answer toquestions 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 anyother 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 otherproduct, different states have different rules for S&H. Whatmakes it even more complicated is that different types of S&Hmay receive different treatment even within the state.

This is the reason that Exactor looks at the type of S&H youuse, and applies the rules of the state that govern that specifictype of shipping and handling.

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Topic Calculating Taxes 12

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

Reponse Sales tax is not as simple as taking a ZIP code and identifyingthe 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 isthat not one of these tax rate tables are certified by the Statetaxing agencies under the Streamline Sales Tax (SST)project. The reason is that state taxing agencies recognizethat looking up tax rates by ZIP codes leads to incorrectresults.

Exactor has sophisticated logic that performs many tasksbefore looking up the tax rate. These include (i) cleaning upthe address, so it conforms to USPS guidelines; (ii) identifyingthe 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.

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Question I have noticed a discrepancy between the tax rate beingcharged 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 eachmethod. When you multiply the total invoice amount by thecompounded tax rate, you will receive the result that you arereferring to. This means that you have totaled all of theinvoice 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 itmight not seem so in this example. The Exactor system treatseach line item as a stand alone transaction, and calculatestaxes owing for each line item by the different applicableindividual tax rates (state, county, city and special district).You will typically see multiple calculations for each differentline item, resulting in a number of calculations (and roundingcalculations) per invoice that is the product of the number ofline items multiplied by the number of taxing agencies.

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Question Why doesn't Exactor calculate taxes for the entireinvoice? Why does it calculate taxes for each line item?

Reponse Performing line-item break downs leads to the highest level ofaccuracy in calculation, and provides a more accurate, fully

trackable audit trail. Calculating taxes for the entire invoicewould mean that you do not benefit from preferred taxtreatment that some of the line items might benefit from (suchas being tax exempt; tax holidays or simply reduced taxrates). By drilling down to the line item level Exactor makessure that each item is taxed in the correct manner using theaccurate rate it should be taxed at. This is the method that isrequired, and according to which Exactor was certified, by theSST. In other words, under SST state reporting requirements,Exactor is required (it is not discretionary) to perform separatecalculations for each line item, and then aggregate them up tothe invoice level, and finally to the reporting level.

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

Reponse This issue is that of the different methods for calculating taxes,

and rounding errors that are directly resulting from eachmethod. When you multiply the total invoice amount by thecompounded tax rate, you will receive the result that you arereferring to. This means that you have totaled all of theinvoice 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 itmight not seem so in this example. The Exactor system treatseach line item as a stand alone transaction, and calculatestaxes owing for each line item by the different applicableindividual tax rates (state, county, city and special district).You will typically see multiple calculations for each differentline item, resulting in a number of calculations (and roundingcalculations) per invoice that is the product of the number ofline 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 forrounding errors. This might be a valid argument on a limitedinvoice basis, however it would still lead to the same errors ona tax reporting basis where taxes are calculated on anaggregated basis for the entire reporting period (in otherwords, invoice amounts are aggregated). Furthermore,different states perform their local taxes roll ups (and rolldowns) differently. Some take all taxes, roll them down to thelocal level, and require calculating and reporting at that lowerlevel. Others require breaking the taxes down to each level,and performing the aggregated calculation at each local levelseparately, and then performing a roll up. So, as you can see,even the aggregate invoice calculation method is not errorfree, and leads to a higher level of untrackable errors.Performing line-item break downs leads to a much higher levelof accuracy in calculation, and provides a more accurate, fullytrackable audit trail. In fact, this is the method that is required,

and according to which Exactor was certified, by the SST. Inother words, under SST state reporting requirements, Exactoris required (it is not discretionary) to perform separatecalculations for each line item, and then aggregate them up tothe invoice level, and finally to the reporting level.

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

Reponse You could definitely do that, all you would need to do is entera gross amount, and Exactor will determine the taxes on that

amount. Exactor does not require a per line-item / transactionbreak-down. The only reason to provide the transaction break-down is for audit purposes, and if there are items that are nottaxable. If the assumption however is that everything istaxable, then the single entry option is definitely a workablesolution.

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Question Can I back-date the Commit Date

Reponse Exactor's systems are set up to allow you to back-date aninvoice up to the last closing date of the Exactor accountbooks. Exactor will typically close the account books on the5th calendar day of a month (adding an extra day or two if the5th falls on a weekend or holiday), giving you several days ineach month to update your records for the preceding calendarmonth. Once the Exactor account books are closed, changescan only be made with the assistance of the Exactor admin.The reason for this security feature is because once theExactor account books are closed, Exactor proceeds intoprocessing transaction information for generating, andgenerating the tax returns. Making changes to transactiondata once returns are being generated would impede theintegrity and accuracy of the tax returns generated by Exactor.

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Question Can I submit a transaction without a date?

Reponse No. Exactor requires that you use a valid date in order toproperly calculate the taxes.

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Question I have applied a personal exemption, but Exactor is stillcalculating taxes.

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

To begin with, the exemption must be listed in the Exactorsystem. You do not need to use the ID number issued byExactor for each exemption, however you must use theidentifying number that you used when listing the exemption inthe Exactor system.

Furthermore, as part of this verification, Exactor checks thatthe transaction falls within the ranges of the effective dates ofthe exemption and the states where the exemption is valid.For example, if an exemption is valid in California, but thetransaction occurred in New York, the exemption will not beapplied, and taxes will be applied to the transaction.

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

Reponse Let us start by stating that Exactor will be happy to provideyou with any level of service that you may require. Exactor ismerely a tool to help you with whatever you feel are yourneeds.

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

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Question What happens if the buyer has a personal exemption?

Reponse Managing exemptions is often the most difficult part of thesales tax process. While not a complicated task, exemptionmanagement can be extremely time-consuming. The last thing

that any sales person wants to do is stop a transaction in midstride to obtain an exemption certificate. The ExactorExemptmodule is designed to automate the process of creating,tracking & managing exemption certificates, without impedingthe flow of the transaction. The module enables uploading ofexemption information in real time, either before or aftertransaction initiation, and provides for cross-referencing of anexemption certificate to multiple transactions. The purchaser isno longer required to produce multiple certificates, but insteadcan upload one certificate and use it across multipletransactions and with all Exactor-enabled vendors.ExactorExempt can also be fully integrated into an onlineshopping cart, so that data can be uploaded in real time, asthe transaction is being processed.

For more information, you should consult the Uer Guide

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Question What if I want to simply compute taxes not for atransaction? Must I put all the information through to theEXACTOR server?

Reponse No. Exactor Suite comes with a dedicated interactive taxcalculator module, that you can access through your admin

site. This is especially useful if (i) you are simply interested inknowing the tax rate for a certain scenario; (ii) you haveatransaction that was not run through the Exactor system; or(iii) low-volume merchants who do not require high volumecapacity and who are interested in using a stand-alone webinterface.

The system recognizes the difference in taxation related toshipping to & from information, and even enables inputtingexemption details. The tax calculator is made available to allmerchants on their admin site, allowing them to perform singleor ad-hoc tax calculations, and then choose whether or not tocommit those ad-hoc calculations to the Exactor system.

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Question How does Exactor determine taxability of a product?

Reponse Exactor has a built-in product taxability matrix in the systemthat defines product exceptions, product types, andcategories. The majority of products are taxed under the

standard rate for the applicable state and local tax district. .

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Topic Exactor Account 8

Question How do I log into my account?

Reponse Every client of Exactor has an admin site where they can viewand 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 firstopened yoiur account.

Please contact your Exactor account representative if you donot have this information.

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Question I do not remember my password?

Reponse Do not worry. You can reset your password from the log-inpage, 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 e-mail that you have listed. You will be required to change yourpassword once you log into your account.

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Question Where do I find my User name?

Reponse Your user name was sent to you when you first opened yoiuraccount.

Please contact your Exactor account representative if you donot have this information.

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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 arecertified by states that are Member of the SST to be accurate,reliable and safe. The Member States stand by thiscertification, and awards certain benefits for using the CSPservices, including limited liability and limited audit exposure.

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Question What is meant by FEIN/SSN?

Reponse An FEIN is a Federal Employers Identification Number. Forfurther information or to apply for an FEIN, please go towww.irs.gov and request form SS-4.

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

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Question I mistakenly used the wrong FEIN when I registered withSST. How do I fix it?

Reponse A seller cannot change the FEIN or Social Security fields oncethey have registered with SST. If you need to fix an FEIN you

should notify your Exactor rep, who will coordinate the changewith the SST Administrator.

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

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Question What is entered in Legal Name?

Reponse Enter the legal name of the business. If the business is a soleproprietorship, enter the name of the person owning thebusiness.

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Question What are the limitations on my User Name

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

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

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Question Should I use my User Name for my shopping cart? For myinvoice?

Reponse We typically recommend using a different username for theactual input tools than the user name for the administrative

personnel (the physical person). For example, we recommendcreating a different user in the XML used by your shoppingcart, or by your invoice (creating a special user for theshopping cart). This practice allows a clear separation in theExactor system between transactions and events that areadded inserted by the shopping cart (invoice, etc) and thosethat are created by the physical user. It is a good practicealso for reporting purposes, auditing purposes and errorbugging. There is no limitation on the number of users, socreating additional users for this purpose is not a problem.

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Question What is meant by State of Incorporation or Organization?

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

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

Reponse No. If you have not yet registered with SST, but are interestedin registering with the SST, Exactor will be happy to performthe registration on your behalf, and provide you with your SSTID number.

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Question Do I need to provide you with State Tax ID numbers (otherthan SST IDs)

Reponse Yes. Unfortunately, Exactor cannot file tax returns on yourbehalf 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 ofSST states, where Exactor can perform the registration onyour behalf). We therefore cannot perform this function onyour behalf. Your Exactor rep will be happy to provide youwith information, URLs and web sites where you can registerwith 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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Topic Exactor Account33

Question What is a NAICS code?

Reponse Exactor uses this code to identify your type of industry. Thismay sometimes effect your tax filing.

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

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Question How Do I Manage Access to my Account

Reponse Access to your account is managed by the different usernames that you can add to your account. You can create asmany user names as you need. We typically recommend thatyou 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 leavesyour company, you can easily deactivate their user name, andprevent them from accessing the account. It also providesyou with a good auditing tool to see who made what changes,and when.

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Question How Do I restrict access to my account from someonewho has left my company?

Reponse By using different user names for each user, if someoneleaves your company, you can easily deactivate their user

name, and prevent them from further accessing your account.

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Topic Filing Tax Returns 1

Question How does Exactor know where to file / report tax returns

Reponse Exactor files returns only in those locations that you tellExactor you have an obligation to file. Exactor does NOTmake any independent evaluation of where you must file yourreturns. Exactor will generate tax returns for the states and

jurisdictions which are checked in the Nexus and FilingInformation page of your Exactor admin site.

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Question How do I update the states where Exactor will file myreturns

Reponse Exactor allows you to define those states in which you have areporting obligation. The Nexus & Filing Information page isloaded from within your Exactor admin site, in the "AccountManagement --> Nexus & Filing Information" tab.

The Nexus & Filing Information page defines those states inwhich the user authorizes Exactor to provide calculation andtax return filing services.

You should identify states in which you have nexus orotherwise a reporting obligation, and make sure that they arechecked accordingly (

Unchecked state means that Exactor will NOT provide taxcalculation and tax filing services for transactions that occurwithin that state.

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Question Why isn't Exactor filing my return?

Reponse Exactor will file returns only in those states that you define forExactor to file. Exactor allows you to define those states inwhich you have a reporting obligation. The Nexus & Filing

Information page is loaded from within your Exactor adminsite, in the "Account Management --> Nexus & FilingInformation" tab.

Unchecked state means that Exactor will NOT provide taxcalculation and tax filing services for transactions that occurwithin 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.

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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 thisfiling. Typically the state will tell you how frequent you mustmake the filing (monthly; quarterly; semi-annual; annual).Exator will make the filing according to the frequency that youdefine.

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

Reponse No! Every state has diifferent filing deadlines. Some requirethe return to be received by the 20th day; other will settle for apost-mark of the 20th; others require that the return bereceived by the end of the month, etc. Exactor has anautomated system that tracks all of these different

requirements, andassures that tax returns are filed in a timelymanner. As long as you approve the return and your taxaccount is funded within the time frames defined by Exactor,Exactor will make the filing for you in a timely manner.

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Question How do I file my tax return?

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

to do so.

Every filing period, Exactor will generate the tax filinginformation, and make it available for you to review andapprove. Once you approve the returns, Exactor will invoiceand charge your account for the taxes owing. Upon receipt ofthe funds, and prior to the due date, Exactor will file all of theapproved tax returns, and remit tax payments on behalf of themerchant.

Where possible, Exactor performs the filing electronically anduse electronic payment methods to remit tax payments. Ifunavailable, Exactor will. Otherwise, Exactor will generate andfile the paper forms, then send in checks to cover payments.In no event will the customer be required to generate and filereturns 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 offiling returns manually or using an external system afterdownloading the months transaction and tax data from theExactor reporting system (in which case, Exactor cannot beheld responsible for the process); or else, a client may filemanually after Exactor has generated the tax returns.

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TopicFiling Tax Returns 97

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

Reponse Unfortunately no, states reqire that each company submit asingle tax return.

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

generating and filing the tax returns.

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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. Thereyou will see a summary of the month's activity (sales; exempt

sales; taxes owing). If the numbers match, all you need to dois click the "Approve" button. This will change the status ofthe report to "Approved". Once approved, Exactor will takeover from there - Exactor will issue an invoice within a fewdays of amounts owing; (ii) Exactor will transfer the invoicedfunds from your account around the 13th or 14th; (iii) Exactorwill file the tax return and transfer the tax payments to thestate and local taxing agencies

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Question What will happen if the amount needed to pay my taxes isnot in my bank account when the service tries to collect

Reponse Exactor WILL NOT FILE A RETURN IF ALL OF THE TAXESARE NOT COLLECTIBLE FROM YOUR ACCOUNT IN ATIMELY MANNER.

Exactor acts as your agent and representative. It cannot file atax return without receiving the funds necessary make the taxpamentl. Exactor takes all steps to assure that funds arecollected in a timely manner. If you fail to make the fundsavailable, Exactor will not proceed with the filing. Exactor willnot be responsible for any late fees and penalties that mayaccrue from a late filing that is a result of your failure to make

funds available in a timely manner.

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Question What do I do if after looking at the tax return I disagreewith the amount owed for taxes? What is the correctionprocess?

Reponse If you disagree with the amount owing, you should click on the

"Reject" (red) return button. An Exactor representative willcontact you shortly to find out the reason, and to takecorrective steps, if needed. Because of the very tight timeframes within which Exactor operates to prepare your taxreturns, invoices, generate and file tax returns, it is highlyadvisable that you contact an Exactor representative if you donot hear from them within 24 hours. This is important to makesure that we do not miss any filing deadlines.

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Topic Filing Tax Returns118

Question How does using Exactor Services help me through anaudit?

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 taxingagencies, are accepted by state auditors as reliable andaccurate tools for sales tax compliance. This enhances yourcredibility and arguments of a good faith reliance, all of whichare critical to support your position in front of the stateauditors. Exactor's comprehensive transaction trails, paymentand remittance trails, all of which are readily available to youand your representatives at time of an audit, save you

countless efforts and resources in recreating your transactionand filing history. The ability to quickly provide comprehensiveand accurate responses to audit inquiries have proven t imeand time again to be critical support tools for audit purposes,oftentimes resolving audit questions quickly and satisfactorily.

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Question What does Exactor do to support me when a state startsauditing me?

Reponse Once a notice of questions is received from the state (evenbefore a formal audit is commenced), Exactor communicates

with the states and the taxing agencies directly, andoftentimes brings the issue to final resolution, to the extentthat the issue does not rise or escalate to the level of a formalaudit.

The moment that the level of inquiries reaches that of an audit,Exactor refers the matter to you , providing you andyourrepresentative with all of the information, comprehensive audittrails of each transaction, detailed filing and tax paymenthistoryy and any other report that you may need in support ofyour audit.

Exactor has managed these processes without further clientintervention 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 SSTstates have agreed that all audits are performed on theExactor system, removing from you the burden of managingSST related audits.

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Topic General Questions 81

Question What is Exactor?

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

Exactors ASP service is designed to provide managementservices, data storage and complete automation of the sales &use tax compliance process. This includes a comprehensivemodule designed to automate the process of creating, tracking& managing exemption information and exemption certificates.

Exactor allows the merchant to focus on SALES, whileExactor deals with the TAX. It provides a comprehensive, end-to-end compliance system for sales and use taxes owing in allcommercial environments.

Exactor's services were desgined by solution providers withstrong technology backgrounds, to bring the highest level of

tax compliance solutions to regular merchants who want tostay in control of their business and comply with tax rules.

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Question What is an ASP (Application Service Provider)?

Reponse An application service provider (ASP) is a business thatprovides computer-based services to customers over anetwork. Software offered using an ASP model is also

sometimes called On-demand software or software as aservice (SaaS). The most limited sense of this business is thatof providing access to a particular application program (suchas customer relationship management) using a standardprotocol such as HTTP.

Exactor users the most advanced technologies to provide asophisticated technology enabled financial service solution.By using these web based technologies, Exactor hasdeveloped a system where all the processing is performed onthe Exactor system.

What this means is savngs to you - you do not need topurchase an expensive software program to install on yoursystem; you do not need to learn how to operate asophisticated software; you do not need to worry about

maintenance.

What this means is that you receive the benefit of asophisticated solution that Fortune 500 companies payhundreds of thousands of dollars, without compromising on thequality of your service.

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Question What services does EXACTOR Suite provide?

Reponse The ASP-based services cover all elements of sales taxcompliance: tax determination; full transaction life cycletracking (including any changes made to a transaction, suchas credits, product returns, or exemptions); providing acomprehensive, verifiable, transactional audit trail; managingexemption certificates; preparing and filing the tax returns; andtransferring tax proceeds to the different tax agencies. All youneed to do is manage your account, and review the returnsbefore we file them for you.

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

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Question What type of reports does Exactor provide?

Reponse The Exactor reporting system provides real time reportingcapabilities on all elements of transactions conducted usingthe Exactor system. The real time reports are available 24x7,

and provide an accurate, timely report on the status of themerchants tax responsibility, and all of its elements.

Reports include: transaction summaries and sales tax returnsaggregated by states and local authorities, transaction countsof any given line item, details of committed transactions, allcalculation requests aggregated by invoice, details of specifictax calculation requests, aggregated by states.

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Question Is using your system safe? Secure?

Reponse YES!!

Exactor's systems were certified by the taxing authorities ofthe SST, Streamline Sales Tax body, which is anamalgamation of the sales tax deprtments within theDepartments of Revenue of over 20 states. Certificationrequired exhaustive system testing for accuracy, security andefficacy using standards as set by NIST, ISO17799 andSAS70. Certification was a very significant seal of approval,attesting to the accuracy, security and overall integrity of theunderlying system. Certification covered all aspects of thebusiness, including accuracy of calculations; security of the

Exactor systems; scalability; safety; privacy and overallprotection of the merchants and their data. SST certification isthe highest level of independent seal of approval provided inthe industry. All other methods of approval are subjective, andmost ofter are paid for by the company being approved. SSTcertification exceeds this level of safety and assurance.

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

Reponse No. Exactors systems are easy to use, and does not requiresophisticated knowhow. You do need to consult with aprofessional regarding some of the set-up items (such as -

where do you have nexus). However the actual set-up andoperation of the system is easy, designed for the non-sophisticated user. As an ASP based system, you do notneed to purchase buy, learn, integrate or maintain newsoftware packages. You do not need to employ IT teams towork on custom installation.

Using Exactors easy-to-use, intuitive on-line MerchantAdministrator Site, you can manage your entire account andview transaction activity in real time. You can add users,restrict users, add products and locations and perform anyadministrative function in this readily accessible safeenvironment.

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Question Once I set up my account, what additional work will I berequired to perform?

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

The fully automated Exactor system reduces the risk ofmisplacing or forgetting about a specific transaction. The

suites full integration into your accounting program means thatall you need to do is enter the transaction into yourtransaction document (invoice, purchase order, credit memo,etc) , then click save as you would for any other book-keepingprogram. Exactor is designed so that you do not need toperform additional activities. It avoids rqeuiring you to enterany additiona key entries.

Once you click "save" Exactor begins to work: your systemconnects to the Exactor service, which calculates the tax forthe transaction and enters it into the invoice right before yourvery eyes. The data then gets stored on the central Exactorserver (for reports and returns generation at a later date).

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

Reponse Exactor is a heaven send for e-commerce and transactionswhere geographic location is unlimited by physical

accessibility. The Exactor e-commerce shopping-cart moduleis designed for those merchants that want to connect their e-commerce shopping carts to the Exactor system forcalculating taxes in real time, so that taxes are included in thefinal transaction amount that is authorized by the customers,and so that transactions are included in final tax reports andreturns.

Typucally, the shopping cart will automatically connect to theExactor system once the buyer completes fililing the shoppingcart, and proceeds to checkout. The buyer does not need toperform any action. The connection to Exactor, calculating thetaxes, and including in the final transaction amount are allautomatic, andcompletely transparent to the buyer. This way,when the buyer approves the transaction, the approval alreadyincludes the taxes that will be used for generating your

returns. They are not hit with taxes that are calculated afterthe fact.

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Question Is using the Exactor service disruptive in any manner tomy 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 anyadditional key input to perform the Exactor tax calculation andcompliance function, and the entire calculation occurs within afew imperceptible seconds. They do not perceive any delay tothe transaction flow.

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

Reponse There are some that think that it would be easier to simplycharge the highest tax rate in the state, and that they can then

avoid any liability for not collecting sales taxes. Following thisadvice would lull the merchant to face a rude awakening. Firstof all, customers that purchase goods from the merchant andwho reside in lower tax rate county could have a legal causeof action against the merchant for overcharging taxes. Themerchant would then face having to refund the difference fromtheir own pocket, in addition to any other legal sanction thatmay be imposed on them. In addition, the issue that faces themerchant isnt just in calculating and collecting the correct taxamount, but rather in the backend reporting. Any state wherethere are different tax rates for different localities (counties,cities, districts, etc), also has complex reporting requirements.The merchant must accurately report the taxes collected foreach and every jurisdiction within the tax report. They expectthe merchant to remit accurately, not less but also not morethan what is required. Filling out the returns is a difficult task,

which the Exactor service performs for you.

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

Reponse Yes! The integration experts at Exactor will be happy to walkyou through the entire set up process. If needed, they willhelp you download a module plug-in for your accounting

software or shopping cart, or will provide you with technicalinformation your technical people might need for morecustomized set-up situations. We will do all that we can sothat you quickly and successfully complete your set-up,confirguration and testing process successfully and proceed toproduction.

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Question How does Exactor make money?

Reponse Exactor charges you for the services thatwe provide. Exactordoes NOT charge anything for set up and integration. It is inour interest, as well as yours, that you set up your systems

accurately and quickly. Providing you with assistancetup frontreduces support issues that may arise later on.

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Question How can Exactor do it so inexpensively? Does this meanthat I am receiving an inferior quality product thatprovided by your competition?

Reponse No! Exactor's service is top of the market, and does not fall inquality or scope to those provided by any of the competitors(in fact, we strongly believe that the scope, robustness andqualirty of our service exceeds those of the competition).Exactor can offer the service at the price points we offerbecause of the high level of automation of our systems. Thesystem, with all of its features and modules, were designedfrom the ground up, so that we do not need to bridge betweendifferent systems and components. As an ASP system, all theprocessing is performed on our system, which means that weavoid integration problems that you may face had we requiredyou to install processing software on your systems. All ofthese features combine to reduce our overall costs, which weare glad to share with you, so that we develop a long lastingrelationship and increase the marketablity of our service.

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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.

When a notice is first received from the state, either directly toExactor, or sometimes - it is forwarded directly to you(depending upon their internal policies, the states masometimes send notices to you, the tax payer), in which caseyou should forward to Exactor the notice assoon as possible.

Once notice is received, Exactor communicates with thestates and the taxing agencies directly, and brings thesematters to final resolution, to the extent that the issue does notrise 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 ofinformation, comprehensive audit trails of each transaction,and any other report that you may need in support of youraudit.

Exactor has managed these processes without further clientintervention in a vast majority of the matters.

One point to note is that of audits under the SST - one of thebenefits of using the Exactor CSP services is that the SSTstates have agreed that all audits are performed on theExactor system, removing from you the burden of managingSST related audits.

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

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

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 astrong support for SOX compliance. To the extent that acompany 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 compliantwith State requirements), the Exactor system provides thesupport necessary for the SOX reporting requirements. .

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Question What is nexus?

Reponse Nexus is a legal term meaning the connection required to existbetween a state and a potential taxpayer, such that the statehas the constitutional right to impose a tax. Different state and

federal courts have inconsistent definitions of what it means tohave sufficient connection to the state to be subject to tax.Nexus is typically defined by physical presence, but may alsobe defined by business activity, affiliation, or other kinds ofpresence, such as sales people calling on customers in thestate. Businesses may have an obligation to report sales oruse tax based on nexus. You should consult with youraccountant or attorney to determine where you may havenexus.

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Question Is "use tax" different than sales tax?

Reponse Sales tax is a levy placed by states on goods or servicespurchased from a business that has nexus in the same stateas the purchaser. "Use" tax is a compensating tax owed whenretail sales tax was due, but was not paid at the time of sale.This can occur, for example, when items are purchased bymail or over the Internet and the out-of state business doesnot have nexus in the state. Use tax may also be owed bybusinesses that use items from inventory and do not pay thesales tax. Use tax is the customer's responsibility to pay, butincreasingly is being collected by vendors on a customer'sbehalf.

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Question Is sales tax owed if a product is purchased through mail-order or on the Internet?

Reponse When you purchase items on the Internet that are shipped toyou 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'ssales tax. If you are not charged sales tax on your purchase,you likely owe use tax.

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Question I have heard that there are no taxes on purchases madeover the Internet

Reponse That is an inaccurate perception. The Internet Tax FreedomAct, originally passed by Congress in 1998, prohibits creating

new taxes. For example, it bars taxes on Internet accessservices provided to end users, meaning taxes on the serviceof providing Internet access. The law also bars taxes onwhatever an access provider reasonably bundles with access,including e-mail and digital subscriber line (DSL) services.

The moratorium does not bar taxes on acquired services, suchas high-speed communications capacity over fiber acquired byInternet service providers (ISP) and used to deliver Internetaccess.

More specifically, the Act does not bar the enforcement ofexisting taxes. Because sales and use taxes existed beforethe Tax Freedom Act, states are permitted to enforce thesetaxes on transactions that were created over the Internet.

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Question What is a resale certificate?

Reponse One reason that a customer may have a personal exemptionis that they are making thepurchase for purpose of resellingthe product.

To qualify for the personal exemption, they must provide you

with a resale certificate. A resale certificate is a standardbusiness form that is used by registered businesses makingpurchases of goods and certain services that they intend toresell in the normal course of business without interveninguse. The use of a resale certificate allows for purchaseswithout paying sales tax. A resale certificate is usuallyrequired for all wholesale sales, otherwise sales tax must becharged. The specific rules for use of resale certificates varyby state.

The resale certificate must be listed in the Exactor exemptionmodule to quality the sale for taxexempt status.

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Question How likely is it that I will be audited?

Reponse Since sales and use taxes are such a large piece of staterevenue, states are becoming more aggressive and havebegun increased audit activity. States use several sources in

selecting businesses for an audit, including Internal RevenueService information, information-sharing programs with otherstates or other intra-state agencies, computer-based randomselection, state department of revenue database information,and business publications, periodicals, journals anddirectories. The average company faces an audit every sevenyears, based on studies of state audits.

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Question What are the penalties if I am found to be delinquent in mysales taxes?

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

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Question What is a billable transaction?

Reponse For determining billable tiers, Exactor looks at the averagenumber of transactions that you conduct on an annual basis.For this purpose, a transaction would be a committed invoicethat you commit to the Exactor system, which is later used forcalculating taxes owing and generating your tax return. Aninvoice would be an invoice that you submit to your customersfor billing purposes.

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Topic Product Mapping 59

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

Reponse Exactor does not replace your inventory control. You can useany 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 alwaysconsider the product to be taxable at the highest local rate. Ifyou want to benefit from possible product specific tax holidaysor reduced tax rates, you should map your products to thecorresponding Exactor EUC code.

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

Reponse You should find the Exactor EUC that best matches the typeof S&H that you use (for example, common carrier; contractcarrier; using your own vehicle; mandatory or optionalcombined shipping and handling; etc). This will make surethat your S&H charges are taxed correctly according to thedifferent rules of each state.

Exactor has sophisticated logic that performs many tasksbefore looking up the tax rate. Amongst these are looking andapplying the correct tax rules to the type of S&H that you areusing. Exactor does not apply a generic rule to S&H, becausethat would lead to inaccurate results.

Shipping and handling may be exempt from taxes, but oftentimes they are taxable. Many times taxability will bedetermined by the state dependig upon the answer toquestions such as (i) where does title pass to the buyer: and(ii) are the handling and shipping epenses combined in theinvoice, or stated seperately. Exactor treats S&H like anyother 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 otherproduct, different states have different rules for S&H. Whatmakes it even more complicated is that different types of S&Hmay receive different treatment even within the state.

This is the reason that Exactor looks at the type of S&H youuse, and applies the rules of the state that govern that specific

type of shipping and handling.

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Question Why do I need to map my products?

Reponse Every state has different tax rules for different products, whatis also referred to as product taxability. In order to apply therules 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 specificproduct exemptions and rules. If you provide high-level, moregeneric, descriptions only, Exactor will apply general taxabilityrules.

First, though, you need to 'map' your products to the Exactorproduct codes, Exactor Unified Code ("EUC"). This action isperformed only once, and then our system will automaticallyknow which taxability rules to apply to each line item in yourinvoices. You dont need to learn these numbers or apply themmanually. Once mapped, simply continue to use your ownSKU codes, and the Exactor system will take care of all of therest. Afterwards, you may access the Product Mapping pageand update it at any point of time in the future.

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

Reponse If you find that a certain product cannot be mapped into any ofthe provided EUC codes, contact your Exactor admin so thatan EUC code can be added accordingly. To the extent that themerchant 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 inventorysystem you do not need to map each and every sku itemyou have. Rather, you can achieve the desired result byassigning a sku range or group of skus to any given EUCcode. Using a hierarchical approach, like-groups can begrouped into a common class of a higher level group. TheExactor mapping schema provides multiple levels ofhierarchies. You will need to drill down the hierarchies to thelevel where you will see the corresponding EUC code, and aplace to insert your matching SKU ranges."

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Topic Shopping Cart 116

Question Can I download transactions from my shopping cart to myaccounting program?

Reponse Yes. Exactor's plug-ins allow you to upload transactions fromthe Exactor admin site directly into your QuickBooks program.

What this means is that transactions that were inputtedstraight into your Exactor admin site, or transactions thatoriginated from another source, such as your shopping cart,and were run through the Exactor system for calculationpurposes (regardless whether or not sales taxes applied), canbe downloaded in their entirety into QB, thus effectivelybridging between your e-commerce shopping cart and yourQB system.

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Topic SST, Streamline Sales Tax21

Question I mistakenly used the wrong FEIN when I registered withSST. How do I fix it?

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

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

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Topic SST, Streamline Sales Tax 30

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. Youwill need to consult with your tax consultant to get the answerto this question. Rest assured though that Exactor can helpyou with your Use tax filings as well as your sales tax returns.

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Question Does Exactor file and pay taxes only in SST states?

Reponse NO!!!! Exactor files returns and pays your sales taxobligations in ALL jurisdictions in the United States, on thestate, county, local and special district levels.

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Question What is a NAICS code?

Reponse Exactor uses this code to identify your type of industry. Thismay sometimes effect your tax filing.

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

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Question What is SST

Reponse The Streamline Sales Tax is an initiative undertaken by manystates for the purpose of trying to reduce the administrativework and expense businesses incur administering state andlocal sales tax. There are many things being done by thestates to reduce the work and expense, includingstandardizing definitions, utilizing common forms andprocedures, the certification of sales tax administrationsoftware for businesses use, and the use of a centralized webservice to allow businesses to register for sales tax collectionpurposes.

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Question What is the purpose of the Streamlined Sales and Use TaxAgreement?

Reponse The purpose of the Agreement is to provide a road map forstates who want to simplify and modernize sales and use tax

administration in the member states in order to substantiallyreduce the burden of tax compliance. The Agreement focuseson improving sales and use tax administration systems for allsellers and for all types of commerce. through all of thefollowing: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 memberstates.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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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 andupdate sales and use tax information for all member states atone time and place. The use of this system will register aseller in each of the member states. Once registered the

seller must collect and remit sales and use taxes for alltaxable sales into the member states.

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Question How Do I Register with SST

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

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

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Question May I Use the Centralized Registration System if I amalready registered in a member State?

Reponse Yes. A seller already registered in a member or associatestates may still use the registration system. Choosing already

registered on the registration form will inform those states thata seller is already registered. States will not issue aduplicate registration, but will just add the Streamlined SalesTax ID to the current registration.

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Question What are the benefits of registering under the Agreement?

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

* 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 taxesfor the registered states.

* The ability to update registration data with all registeredstates at one time and place.

* Sellers gain the ability to update registration data with allmember and associate member states at one time and place

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Question What is a CSP (Certified Service Provider)?

Reponse An important and new component of the Streamline initiative isthe certification of sales tax administration software forbusiness use. A CSP is designed to allow a business to

outsource its entire sales tax administration function. Thefollowing is the definition of a CSP from the Streamlined Salesand Use Tax Agreement (SSUTA): An agent certified underthe Agreement to perform all the seller's sales and use taxfunctions, other than the seller's obligation to remit tax on itsown purchases. The software system of a CSP knows whatproducts and services are taxable, knows the tax rate at whichthey 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 hasevaluated the accuracy of the tax decisions and is willing tostand by the accuracy of the decisions they have evaluated.

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Question What is the definition of a volunteer seller?

Reponse The following is the definition of a Volunteer seller forpurposes of Certified Service Provider (CSP): Volunteer Sellerin a Member State or Associate Member State means a Sellerthat has registered pursuant to Article IV of the StreamlinedSales & Use Tax Agreement through the Central RegistrationSystem and:

* Represented in its registration that it did not have a legal

requirement to register and in fact did not have a requirementto register in the Member State or Associate Member State atthe time of registration, regardless of any previous registrationthe Seller may have made in the Member State or AssociateMember State; or

* For Sellers who registered with the Member State orAssociate Member State after November 12, 2002 , the Sellermeets all of the following criteria during the twelve (12) monthperiod immediately preceding the date of registration with theMember 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.

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Question Is there a fee to register under the Agreement?

Reponse There are no fees or other charges for a seller to register in astate 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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Question May I use the SST registration even if I have a legalobligation to register in a state?

Reponse Any seller that wants or needs to register in all the memberstates may use the registration system. A seller that has alegal obligation to register in a state will also need to contactthose states for further sales tax licensing requirements.

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Question If my company is already registered in some of themember states how will this affect my Streamlinedregistration?

Reponse There is a place on the registration form to list if you arealready registered in a state. In this case most states will notissue a duplicate registration, but will just add the StreamlinedSales Tax ID to the current registration.

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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 registrationsystem. Go to www.sstregister.org/sellers and click on

Update Registration. At this point you will need your SST IDand password to continue. Click on Change RegistrationStatus, and follow the instructions to cancel your registration.If a seller collected tax for member or associate states duringthe time they were registered, they are required to remit thetax to the state(s).A seller should consult with the state or their attorney oraccountant before they cancel their registration in any statewhere they have a legal obligation to register to determine therequirements for remaining registered with that state.Any seller who received an amnesty from any Streamline statewill lose that amnesty if they cancel their registration within 36months of registration. They will also lose their amnesty ifthey cancel in any full member state during the 36 monthcollection requirement.Any seller that wants to register after having canceled their

registration must complete a new registration and receive anew SST ID.

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Question I registered with Streamlined and am now registered inmore states than I want. May I cancel in the states inwhich 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 toregister with only a few states they should not use theStreamline registration system.Amnesty is not available in any state unless a seller isregistered with all of the full member states.

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Question My company went out of business. If I cancel will I losemy amnesty?

Reponse If a seller goes out of existence and has paid all of the taxesdue, they will not lose the amnesty when they cancel theirregistration.

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Question What are the requirements for filing returns?

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

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Question How are tax payments handled?

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

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Question Are sellers issued an SST ID number for each state?

Reponse Once the registration process is complete, you will receive asingle unique Streamlined Sales Tax ID number which will beused as your tax ID in ALL Member states. The SST ID is thesellers registration number and is to be used forcommunication with the states or the StreamlinedAdministrator. Some states may send you additional tax IDs

for that state, which you should retain in your records.

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Question What is the SST Beginning Effective Date?

Reponse This is the date that the seller will begin collecting tax for eachstate in which they were not previously registered. The date

cannot be more than 30 days following registration with theSST. Requests for extensions may be filed.

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Question What if a seller registered and used the wrong effectivedate? The company will not be ready to begin collectingin 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 theirregistration and reapply when they are ready. The seller canrequest an extension of the effective date.

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Question What is Indicate Seller Registry Status?

ReponseThis is the place where you indicate the states where youwant to register for sales tax collection purposes or indicatewhich states you are already registered.

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Question What does it mean if I select a state to register to startcollecting sales tax?

Reponse In this column select each state where you are not alreadyregistered to collect sales taxes.

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Question I got a confirmation number when I updated myinformation. Will I use that number if I need to updateagain?

Reponse A confirmation is provided each time a registration change issubmitted. It should be retained as proof that registration datawas submitted, but does not need to be provided forsubsequent registration updates.

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

Reponse All states will provide all sellers with information about how toproperly report and file the sales or use tax that you collect.

The purpose of this question is to allow the seller to determineif the seller wants to receive information from a state aboutother state tax obligations. Some states have additional taxobligations that sellers need to understand when conductingbusiness in those states.In addition, the Streamlined Sales and Use Tax Agreementmakes a distinction between a seller that "has no legalrequirement to register" in a state and those that do.Specifically, if a seller does not have a legal requirement toregister, the seller cannot be charged a registration fee by thestate (SSUTA Section 303 (B)), they can file their returns lessfrequently under certain circumstances (SSUTA Section 318(D)), and they can complete their registration using this onlineregistration process and not be required to provide the statewith any additional information (SSUTA Section 401 (C)). Alegal requirement to register is determined by the laws of

each individual state and generally involves the degree towhich you may have a physical presence in that state.If you choose to receive such information from a state, thatstate will contact you and provide you with information aboutfully registering in that state. The state may also provide youwith information about other tax and licensing obligations youmay have. If you use an address in a state, that state maycontact you about possible registration requirements you mayhave.A sellers legal obligation to register in a state does not impactthe amnesty that may be available to the seller. A seller thatregisters through this system is still eligible for amnesty in allof the member states and associate member states (for whichthey elect to begin collecting sales tax) regardless of how theychoose to register.

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

Reponse Your Exactor rep will be happy to provide you with thisservice. Alternatively, you can go towww.sstregister.org/sellers and click on Update Registration.

Select Update Business/Contact Info to make any changes tothe contact information and email address.

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Question We were registered with one of the SST states before weregisterd with Streamline. What will happen with ourregistration? 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 stateshould cross-reference your existing state registration with thenew SST ID number. All filings in SST states will be doneunder the new SST ID number.

With that being said, we highly recommend that you contactthe state and make sure that they either (i) cross referencedthe old registration with the new SST ID; or (ii) cancelled outthe old registration. If they don't there is a risk that the stateswill issue a notice of delinquency for failure to file a returnunder the old registration number. The matter will eventuallybe cleared up, but by contacting the state earlier on you cansave yourself many headaches later on.

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Topic State Registration 14

Question Must I register with the states?

Reponse Yes. Unfortunately, states do not accept tax returns unlessyou are registered with the state, and have included your stateregistration number with the return.

But don't think that not having a registration is an excuse fornot filing - states will impose fines and penalties for failure tofile tax returns in a timely manner, even if your reason was

that you did not have a tax ID. Therefore you should registerwith any state that you think you will have an obligation to file(nexus) as soon as possible, and provide Exactor with the taxID that was issued to you.

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Question Will Exactor register me with all states?

Reponse Exactor can provide services to register your business with theSST states only under the SST register. Exactor cannotprovide however registration services that is not performed via

the SST register, and in non-SST states and localjurisdictions. Exactor will be happy to provide assistance,such as points of referral, where to register.

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

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

Reponse You should register only in those states that you have anobligation to register or where you want to file returns.Exactor does not provide any advice, legal or tax, tomerchants, including advise about where they need toregister. You should consult with your attorneys andconsultants to make this determination. Exactor merelyprovides a tool to automate processes that they need tootherwise perform by themselves. You do not have to registerin all states to benefit from our services. Exactor will provideservices (calculation, generating and filing the returns and

making the payments) only in those states where you wantsus to.

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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 mailingaddress.

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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 yourbehalf 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 ofSST states, where Exactor can perform the registration onyour behalf). We therefore cannot perform this function onyour behalf. Your Exactor rep will be happy to provide youwith information, URLs and web sites where you can registerwith 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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Topic State Registration32

Question Does Exactor file and pay taxes only in SST states?

Reponse NO!!!! Exactor files returns and pays your sales taxobligations in ALL jurisdictions in the United States, on thestate, county, local and special district levels.

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Topic Taxes, Collecting and Paying 17

Question What is the tax credit that is available by the state ofWashington?

Reponse To help retailers transition to destination-based sales tax, thestate of Washington is providing to small retailers up to a

$1,000 tax credit, to offset any necessary changes to theiraccounting, point-of-sale, or other systems, or two years ofassistance from a certified service provider (CSP). As a CSP,using the Exactor services will make you eligible for thiscredit. The credit is available on the excise tax return,beginning with the July 2008 return.

You are are eligible for this credit if you meet all of thefollowing requirements:

1. Gross less than $500,000 in Washington sales annually;2. Receive at least five percent of your taxable sales incomefrom delivering the products you sell (compared to over thecounter sales that occur in your premises); and3. Receive at least one percent of your taxable sales incomefrom delivering products outside the jurisdiction where you are

located (for example to a different county, different state).

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Question How do I register for the Washington Credit?

Reponse You do not need to make any special registration to be eligiblefor the Washington tax credit. All you will need to do ismaintain documentation to support your claim for eligibility,

and take the credit on your tax returns.

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Question How does Exactor colle

FAQ - Sales Tax Managment Software

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Transcript of FAQ - Sales Tax Managment Software