Common use of Interpretations issued Clause in Contracts

Interpretations issued. (a) The Governing Board issued Interpretation 2006-03 on April 18, 2006 relating to the (b) The Governing Board issued Interpretation 2007-02 on September 20, 2007 relating to the sourcing of sales 5 A. A member state that has local jurisdictions that levy or receive sales or use taxes may elect to 6 source the retail sale of tangible personal property and digital goods pursuant to the 7 provisions of this section in lieu of the provisions of subsection A (2), (3) and (4) of Section 8 310 if they comply with all provisions of subsection (C) of this section and the only 9 exception to Section 310 is the exception provided for in subsection (B) of this section. 10 B. A member state may source retail sales, excluding lease or rental, of tangible personal 11 property or digital goods to the location where the order is received by the seller if: 12 1. The order is received in the same state by the seller where receipt of the product by 13 the purchaser (or the purchaser’s donee, designated as such by the purchaser) occurs; 14 2. Location where receipt of the product by the purchaser occurs is determined pursuant 15 to Section 310A (2), (3) and (4); and 16 3. At the time the order is received, the recordkeeping system of the seller used to 17 calculate the proper amount of sales or use tax to be imposed captures the location 18 where the order is received. 19 C. A member state electing to source sales pursuant to this section shall comply with all of the 20 following: 21 1. When the location where the order is received by the seller and the location where the 22 receipt of the product by the purchaser (or the purchaser’s donee, designated as such 23 by the purchaser) occurs as determined pursuant to Section 310A (2), (3) and (4) are 24 in different states, the sale must be sourced pursuant to the provisions of Section 310. 25 2. When the sale is sourced pursuant to this section to the location where the order is 26 received by the seller, only the sales tax for the location where the order is received 27 by the seller may be levied. No additional sales or use tax based on the location 28 where the product is delivered to the purchaser may be levied on that sale. The 29 purchaser shall not be entitled to any refund if the combined state and local rate or 1 rates at the location where the product is received by the purchaser is lower than the 2 rate where the order is received by the seller. 3 3. A member state may not require a seller to utilize a recordkeeping system which 4 captures the location where an order is received to calculate the proper amount of 5 sales or use tax to be imposed. 6 4. A purchaser shall have no additional liability to the state for tax, penalty or interest on 7 a sale for which the purchaser remits tax to the seller in the amount invoiced by the 8 seller if such invoice amount is calculated at either the rate applicable to the location 9 where receipt by the purchaser occurs or at the rate applicable to the location where 10 the order is received by the seller. A purchaser may rely on a written representation 11 by the seller as to the location where the order for such sale was received by the 12 seller. When the purchaser does not have a written representation by the seller as to 13 the location where the order for such sale was received by the seller, the purchaser 14 may use a location indicated by a business address for the seller that is available from 15 the business records of the purchaser that are maintained in the ordinary course of the 16 purchaser’s business to determine the rate applicable to the location where the order 17 was received. 18 5. The location where the order is received by or on behalf of the seller means the 19 physical location of a seller or third party such as an established outlet, office location 20 or automated order receipt system operated by or on behalf of the seller where an 21 order is initially received by or on behalf of the seller and not where the order may be 22 subsequently accepted, completed or fulfilled. An order is received when all of the 23 information from the purchaser necessary to the determination whether the order can 24 be accepted has been received by or on behalf of the seller. The location from which 25 a product is shipped shall not be used in determining the location where the order is 26 received by the seller. 27 6. Such member state shall provide for direct pay permits pursuant to Section 326 of this 28 Agreement and the requirements of this subsection. Purchasers which remit sales and 29 use tax pursuant to such a permit shall remit tax at the rate in effect for the location 30 where receipt of the product by the purchaser occurs or the product is first used as 1 determined by state law. A member state may establish reasonable thresholds at 2 which level the member state will consider direct pay applications, provided the 3 threshold must be based upon purchases with no distinction between taxable and non- 4 taxable purchases. The member state shall establish a process for application for a 5 direct pay permit as provided herein. The member state may require the applicant to 7 a. Ability to comply with the sales and use tax laws of the state, 8 b. A showing of a business purpose for seeking direct payment permit 9 and how the permit will benefit tax compliance, and 10 c. Proof of good standing under the tax laws of the state. 11 The member state shall review all permit applications in a timely manner so that 12 applicants receive notification of authorization or denial within one hundred twenty 13 (120) days. The member state may not limit direct pay applicants to businesses 14 engaged in manufacturing or businesses that do not know the ultimate use of the 15 product at the time of the purchase. 16 7. When taxable services are sold with tangible personal property or digital products 17 pursuant to a single contract or in the same transaction, are billed on the same billing 18 statement(s), and, because of the application of this section, would be sourced to 19 different jurisdictions, a member state shall elect either origin sourcing or destination 20 sourcing to determine a single situs for that transaction. Such member state election 21 is required until such time as the Governing Board adopts a uniform methodology to 22 address such sales. 23 8. A member state that elects to source the sale of tangible personal property and digital 24 goods pursuant to the provisions of this section shall inform the Governing Board of 25 such election. 26 See Compiler’s Notes for history. 27 Section 311: GENERAL SOURCING DEFINITIONS‌ 28 For the purposes of Section 310, subsection (A), the terms "receive" and "receipt" mean: 29 A. Taking possession of tangible personal property, 30 B. Making first use of services, or 1 C. Taking possession or making first use of digital goods, whichever comes first. 2 The terms "receive" and "receipt" do not include possession by a shipping company on behalf of 3 the purchaser. 4 Section 312: MULTIPLE POINTS OF USE (Repealed on December 14, 2006)‌ 5 See Compiler’s Notes for history. 7 Section 313: DIRECT MAIL SOURCING 8 A. Notwithstanding Sections 310 and 310.1, the following provisions apply to sales of 9 “advertising and promotional direct mail:” 10 1. A purchaser of “advertising and promotional direct mail” may provide the seller 11 with either: 12 a. A direct pay permit. 13 b. An Agreement certificate of exemption claiming “direct mail” (or other 14 written statement approved, authorized or accepted by the state); or 15 c. Information showing the jurisdictions to which the “advertising and 16 promotional direct mail” is to be delivered to recipients. 17 2. If the purchaser provides the permit, certificate or statement referred to in 18 subparagraph a or b of paragraph 1 of subsection (A) of this section, the seller, in the absence of

Interpretations issued. (a) The Governing Board issued Interpretation 2006-03 on April 18, 2006 relating to the (b) The Governing Board issued Interpretation 2007-02 on September 20, 2007 relating to the sourcing of sales 5 A. A member state that has local jurisdictions that levy or receive sales or use taxes may elect to 6 source the retail sale of tangible personal property and digital goods pursuant to the 7 provisions of this section in lieu of the provisions of subsection A (2), (3) and (4) of Section 8 310 if they comply with all provisions of subsection (C) of this section and the only 9 exception to Section 310 is the exception provided for in subsection (B) of this section. 10 B. A member state may source retail sales, excluding lease or rental, of tangible personal 11 property or digital goods to the location where the order is received by the seller if: 12 1. The order is received in the same state by the seller where receipt of the product by 13 the purchaser (or the purchaser’s donee, designated as such by the purchaser) occurs; 14 2. Location where receipt of the product by the purchaser occurs is determined pursuant 15 to Section 310A (2), (3) and (4); and 16 3. At the time the order is received, the recordkeeping system of the seller used to 17 calculate the proper amount of sales or use tax to be imposed captures the location 18 where the order is received. 19 C. A member state electing to source sales pursuant to this section shall comply with all of the 20 following: 21 1. When the location where the order is received by the seller and the location where the 22 receipt of the product by the purchaser (or the purchaser’s donee, designated as such 23 by the purchaser) occurs as determined pursuant to Section 310A (2), (3) and (4) are 24 in different states, the sale must be sourced pursuant to the provisions of Section 310. 25 2. When the sale is sourced pursuant to this section to the location where the order is 26 received by the seller, only the sales tax for the location where the order is received 27 by the seller may be levied. No additional sales or use tax based on the location 28 where the product is delivered to the purchaser may be levied on that sale. The 29 purchaser shall not be entitled to any refund if the combined state and local rate or 1 rates at the location where the product is received by the purchaser is lower than the 2 rate where the order is received by the seller. 3 3. A member state may not require a seller to utilize a recordkeeping system which 4 captures the location where an order is received to calculate the proper amount of 5 sales or use tax to be imposed. 6 4. A purchaser shall have no additional liability to the state for tax, penalty or interest on 7 a sale for which the purchaser remits tax to the seller in the amount invoiced by the 8 seller if such invoice amount is calculated at either the rate applicable to the location 9 where receipt by the purchaser occurs or at the rate applicable to the location where 10 the order is received by the seller. A purchaser may rely on a written representation 11 by the seller as to the location where the order for such sale was received by the 12 seller. When the purchaser does not have a written representation by the seller as to 13 the location where the order for such sale was received by the seller, the purchaser 14 may use a location indicated by a business address for the seller that is available from 15 the business records of the purchaser that are maintained in the ordinary course of the 16 purchaser’s business to determine the rate applicable to the location where the order 17 was received. 18 5. The location where the order is received by or on behalf of the seller means the 19 physical location of a seller or third party such as an established outlet, office location 20 or automated order receipt system operated by or on behalf of the seller where an 21 order is initially received by or on behalf of the seller and not where the order may be 22 subsequently accepted, completed or fulfilled. An order is received when all of the 23 information from the purchaser necessary to the determination whether the order can 24 be accepted has been received by or on behalf of the seller. The location from which 25 a product is shipped shall not be used in determining the location where the order is 26 received by the seller. 27 6. Such member state shall provide for direct pay permits pursuant to Section 326 of this 28 Agreement and the requirements of this subsection. Purchasers which remit sales and 29 use tax pursuant to such a permit shall remit tax at the rate in effect for the location 30 where receipt of the product by the purchaser occurs or the product is first used as 1 determined by state law. A member state may establish reasonable thresholds at 2 which level the member state will consider direct pay applications, provided the 3 threshold must be based upon purchases with no distinction between taxable and non- 4 taxable purchases. The member state shall establish a process for application for a 5 direct pay permit as provided herein. The member state may require the applicant to 7 a. Ability to comply with the sales and use tax laws of the state, 8 b. A showing of a business purpose for seeking direct payment permit 9 and how the permit will benefit tax compliance, and 10 c. Proof of good standing under the tax laws of the state. 11 The member state shall review all permit applications in a timely manner so that 12 applicants receive notification of authorization or denial within one hundred twenty 13 (120) days. The member state may not limit direct pay applicants to businesses 14 engaged in manufacturing or businesses that do not know the ultimate use of the 15 product at the time of the purchase. 16 7. When taxable services are sold with tangible personal property or digital products 17 pursuant to a single contract or in the same transaction, are billed on the same billing 18 statement(s), and, because of the application of this section, would be sourced to 19 different jurisdictions, a member state shall elect either origin sourcing or destination 20 sourcing to determine a single situs for that transaction. Such member state election 21 is required until such time as the Governing Board governing board adopts a uniform methodology to 22 address such sales. 23 8. A member state that elects to source the sale of tangible personal property and digital 24 goods pursuant to the provisions of this section shall inform the Governing Board governing board of 25 such election. 26 See Compiler’s Notes for history. 27 Section 311: GENERAL SOURCING DEFINITIONS‌ 28 For the purposes of Section 310, subsection (A), the terms "receive" and "receipt" mean: 29 A. Taking possession of tangible personal property, 30 B. Making first use of services, or 1 C. Taking possession or making first use of digital goods, whichever comes first. 2 The terms "receive" and "receipt" do not include possession by a shipping company on behalf of 3 the purchaser. 4 Section 312: MULTIPLE POINTS OF USE (Repealed on December 14, 2006)‌ 5 See Compiler’s Notes for history. 7 Section 313: DIRECT MAIL SOURCING 8 A. Notwithstanding Sections 310 and 310.1, the following provisions apply to sales of 9 “advertising and promotional direct mail:” 10 1. A purchaser of “advertising and promotional direct mail” may provide the seller 11 with either: 12 a. A direct pay permit. 13 b. An Agreement certificate of exemption claiming “direct mail” (or other 14 written statement approved, authorized or accepted by the state); or 15 c. Information showing the jurisdictions to which the “advertising and 16 promotional direct mail” is to be delivered to recipients. 17 2. If the purchaser provides the permit, certificate or statement referred to in 18 subparagraph a or b of paragraph 1 of subsection (A) of this section, the seller, in the absence of

Interpretations issued. (a) The Governing Board issued Interpretation 2006-03 on April 18, 2006 relating to the (b) The Governing Board issued Interpretation 2007-02 on September 20, 2007 relating to the sourcing of sales 5 A. A member state that has local jurisdictions that levy or receive sales or use taxes may elect to 6 source the retail sale of tangible personal property and digital goods pursuant to the 7 provisions of this section in lieu of the provisions of subsection A (2), (3) and (4) of Section 8 310 if they comply with all provisions of subsection (C) of this section and the only 9 exception to Section 310 is the exception provided for in subsection (B) of this section. 10 B. A member state may source retail sales, excluding lease or rental, of tangible personal 11 property or digital goods to the location where the order is received by the seller if: 12 1. The order is received in the same state by the seller where receipt of the product by 13 the purchaser (or the purchaser’s donee, designated as such by the purchaser) occurs; 14 2. Location where receipt of the product by the purchaser occurs is determined pursuant 15 to Section 310A (2), (3) and (4); and 16 3. At the time the order is received, the recordkeeping system of the seller used to 17 calculate the proper amount of sales or use tax to be imposed captures the location 18 where the order is received. 19 C. A member state electing to source sales pursuant to this section shall comply with all of the 20 following: 21 1. When the location where the order is received by the seller and the location where the 22 receipt of the product by the purchaser (or the purchaser’s donee, designated as such 23 by the purchaser) occurs as determined pursuant to Section 310A (2), (3) and (4) are 24 in different states, the sale must be sourced pursuant to the provisions of Section 310. 25 2. When the sale is sourced pursuant to this section to the location where the order is 26 received by the seller, only the sales tax for the location where the order is received 27 by the seller may be levied. No additional sales or use tax based on the location 28 where the product is delivered to the purchaser may be levied on that sale. The 29 purchaser shall not be entitled to any refund if the combined state and local rate or 1 rates at the location where the product is received by the purchaser is lower than the 2 rate where the order is received by the seller. 3 3. A member state may not require a seller to utilize a recordkeeping system which 4 captures the location where an order is received to calculate the proper amount of 5 sales or use tax to be imposed. 6 4. A purchaser shall have no additional liability to the state for tax, penalty or interest on 7 a sale for which the purchaser remits tax to the seller in the amount invoiced by the 8 seller if such invoice amount is calculated at either the rate applicable to the location 9 where receipt by the purchaser occurs or at the rate applicable to the location where 10 the order is received by the seller. A purchaser may rely on a written representation 11 by the seller as to the location where the order for such sale was received by the 12 seller. When the purchaser does not have a written representation by the seller as to 13 the location where the order for such sale was received by the seller, the purchaser 14 may use a location indicated by a business address for the seller that is available from 15 the business records of the purchaser that are maintained in the ordinary course of the 16 purchaser’s business to determine the rate applicable to the location where the order 17 was received. 18 5. The location where the order is received by or on behalf of the seller means the 19 physical location of a seller or third party such as an established outlet, office location 20 or automated order receipt system operated by or on behalf of the seller where an 21 order is initially received by or on behalf of the seller and not where the order may be 22 subsequently accepted, completed or fulfilled. An order is received when all of the 23 information from the purchaser necessary to the determination whether the order can 24 be accepted has been received by or on behalf of the seller. The location from which 25 a product is shipped shall not be used in determining the location where the order is 26 received by the seller. 27 6. Such member state shall provide for direct pay permits pursuant to Section 326 of this 28 Agreement and the requirements of this subsection. Purchasers which remit sales and 29 use tax pursuant to such a permit shall remit tax at the rate in effect for the location 30 where receipt of the product by the purchaser occurs or the product is first used as 1 determined by state law. A member state may establish reasonable thresholds at 2 which level the member state will consider direct pay applications, provided the 3 threshold must be based upon purchases with no distinction between taxable and non- 4 taxable purchases. The member state shall establish a process for application for a 5 direct pay permit as provided herein. The member state may require the applicant to 7 a. Ability to comply with the sales and use tax laws of the state, 8 b. A showing of a business purpose for seeking direct payment permit 9 and how the permit will benefit tax compliance, and 10 c. Proof of good standing under the tax laws of the state. 11 The member state shall review all permit applications in a timely manner so that 12 applicants receive notification of authorization or denial within one hundred twenty 13 (120) days. The member state may not limit direct pay applicants to businesses 14 engaged in manufacturing or businesses that do not know the ultimate use of the 15 product at the time of the purchase. 16 7. When taxable services are sold with tangible personal property or digital products 17 pursuant to a single contract or in the same transaction, are billed on the same billing 18 statement(s), and, because of the application of this section, would be sourced to 19 different jurisdictions, a member state shall elect either origin sourcing or destination 20 sourcing to determine a single situs for that transaction. Such member state election 21 is required until such time as the Governing Board governing board adopts a uniform methodology to 22 address such sales. 23 8. A member state that elects to source the sale of tangible personal property and digital 24 goods pursuant to the provisions of this section shall inform the Governing Board governing board of 25 such election. 26 See Compiler’s Notes for history. 27 Section 311: GENERAL SOURCING DEFINITIONS‌ 28 For the purposes of Section 310, subsection (A), the terms "receive" and "receipt" mean: 29 A. Taking possession of tangible personal property, 30 B. Making first use of services, or 1 C. Taking possession or making first use of digital goods, whichever comes first. 2 The terms "receive" and "receipt" do not include possession by a shipping company on behalf of 3 the purchaser. 4 Section 312: MULTIPLE POINTS OF USE (Repealed on December 14, 2006)‌ 5 See Compiler’s Notes for history. 7 Section 313: DIRECT MAIL SOURCING 8 A. Notwithstanding Sections 310 and 310.1, the following provisions apply to sales of 9 “advertising and promotional direct mail:” 10 1. A purchaser of “advertising and promotional direct mail” may provide the seller 11 with either: 12 a. A direct pay permit. 13 b. An Agreement certificate of exemption claiming “direct mail” (or other 14 written statement approved, authorized or accepted by the state); or 15 c. Information showing the jurisdictions to which the “advertising and 16 promotional direct mail” is to be delivered to recipients. 17 2. If the purchaser provides the permit, certificate or statement referred to in 18 subparagraph a or b of paragraph 1 of subsection (A) of this section, the seller, in the absence of