Frequently Asked Questions

Am I required to collect sales taxes?

Merchants are required to collect sales taxes when the customer is in the same state or the merchant has "substantial nexus" in the customer's state.

"Nexus is typically defined by physical presence, but may also be defined by business activity, affiliation or other kind of presence." (see complete definition)

Additionally, most states have what is called a "Use Tax" for when the seller is in a different state.  This type of tax is the customer's responsibility to pay but is increasingly being collected by vendors at their behest.

"A use tax is a tax imposed by states to collect taxes on sales which do not take place in their state.  The tax is meant to insure that all purchases are taxed, whether purchased locally or from out of state sellers."

What is the Federal government doing about these taxes?

This really has nothing to do with the Federal government since sales taxes are existing state laws that states have a Constitutional right to enact and enforce.  The latest development involves ten states, and 18 observing states, who are developing plans for a Streamlined Sales Tax System for the 21st Century.  This project expects to begin enforcing the collection of sales taxes on remote sales, this Fall, regardless of the medium through which a sale takes place.

How many tax authorities are there?

There have been many estimates in the press, all over the map!  There are, in fact, just over 7,000 distinct tax authorities that levy a sales or use tax: 54 states, 1,600 counties, and 4,500 cities.

What about international VAT taxes?

Value Added Taxes are common outside the U.S. and are "consumption-based" like our sales taxes are (i.e. the rate is determined according to the location of the consumer).  If a U.S. merchant sells to a foreign customer, a VAT would be added upon import that must be paid by the consumer before it can be received.  If a foreign merchant sells to a customer in the U.S., the consumer is expected to pay a local "use" tax.

What is the average sales tax nationally?

The average sales tax across the nation is 7.25%, including all county and city taxes.  You can view the average combined sales taxes within each state on a map of the USA.

How secure is your server?

We are very concerned about the security and privacy of our merchant accounts and transactional data!  Firstly, our server is authenticated by Verisign so that all transactions are encrypted and only seen by us.  Secondly, fund transfers are triple-password protected and then audited by both Mellon Bank and Arthur Andersen to ensure that the funds safely reach the appropriate tax authorities.  Finally, to protect against any outages or "denial of service" attacks, we have several redundant servers distributed around the U.S. to guarantee merchants 100%, 24/7 access.  For more information, please review our Security Statement

What product categories do you support?

We are following the FTA's efforts towards simplification and harmonization of state tax codes.  Toward that end, we support a simplified list of product categories.

What about licensing?

All taxing authorities, at the state, county, and local levels require businesses to obtain a sales tax license in order to file and remit taxes.  STC will do all the paperwork necessary to get you licensed into wherever your sales may reach and then continue to file for you even when no sales are made (another requirement of the tax authorities).

How do I handle returns and refunds?

If you are posting transactions with us that we will be filing and remitting on your behalf, a return is simply a transaction with a negative amount, to subtract out the amount previously charged and collected.

Cash sales are posted just like any other transaction—the STC doesn't need to know or care about the method of payment used, but it is imperative for a merchant to post all sales because we are required to report sales totals to the taxing authorities to document in case of an audit.

Do I need any special equipment or hardware to use your software?

No, only our software running with yours on your web server.

Do I need to be a programmer to use your software?

Probably.  We provide a few different ways for you to use our software, but they all require some kind of programming to be able to use the results.  We supply a DLL that has both a simple, callable API as well as a "DCOM" interface (if you don't know what that is, don't ask! ;).  For the adventurous types, our interface is easy to integrate into a VBA development environment like VB, Excel, Word, or Access.  We also supply a simple command line interface to get quick results by hand.

How much does it all cost?

You will be charged an initial setup fee of $1,350 after you sign up and are ready to download our software.  Beyond that, there is an annual maintenance fee of $250 to keep your account current.  There are no additional charges for filing and remitting use taxes collected on remote sales.  All you need to do is post all your transactions with us (just the amount and zip code), and we'll do all the rest—completely free!  For sales taxes, there is a small 3% transaction fee charged on in-state purchases (those with "nexus") for us to file and remit those taxes.

I don't need filing and remitting--just calculating taxes

We are often asked if just the calculations can be purchased for less, but our pricing model really just covers the calculating of tax rates, so there's nowhere less to go!  The cost of filing and remitting are borne by the tax authorities and cost nothing to the merchant.  We charge a fair and competitive price for calculating tax rates and then our customers benefit by receiving complete back-end processing services for free if they choose to take advantage of them.

I just want to calculate a sales tax!

Actually, it's a little more complicated than that (see "nexus" above).  Based on where you are and where the customer is, a sales tax may be applicable, or a use tax might be applicable.  When merchants register with us, they also specify their legal nexus so we can distinguish which rate to apply on each transaction.

I forgot my password!

We have a helper page to get you back in business.

Where is the STC??

We have offices in PA, near Philadelphia.  Use the "Contact Us" link for more information.