Ohio Code 5740.07 – Effect of agreement
(A) A certified service provider is the agent of the seller with whom the certified service provider has contracted for the collection and remittance of sales and use taxes. As the seller’s agent, the certified service provider is liable for sales and use taxes due each member state on all sales transactions it processes for the seller, except as provided in this section.
Terms Used In Ohio Code 5740.07
- Agreement: means the streamlined sales and use tax agreement as amended and adopted on January 27, 2001, by the national conference of state legislatures' special task force on state and local taxation of telecommunications and electronic commerce, and unanimously adopted by the national conference of state legislatures' executive committee, and as subsequently amended and adopted by the member states. See Ohio Code 5740.01
- Certified automated system: means software certified jointly by the member states to calculate the sales or use tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction. See Ohio Code 5740.01
- Certified service provider: means an agent certified jointly by the member states to perform all of the seller's sales and use tax functions. See Ohio Code 5740.01
- Fraud: Intentional deception resulting in injury to another.
- Member state: means any state that is a signatory to the agreement. See Ohio Code 5740.01
- Person: means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity. See Ohio Code 5740.01
- Personal property: All property that is not real property.
- Probable cause: A reasonable ground for belief that the offender violated a specific law.
- Seller: means any person making sales, leases, or rentals of personal property or services. See Ohio Code 5740.01
- State: means any state of the United States and the District of Columbia. See Ohio Code 5740.01
- Use tax: means the tax levied by section 5741. See Ohio Code 5740.01
A seller that contracts with a certified service provider is not liable to the state for sales or use taxes due on transactions processed by the certified service provider, unless the seller misrepresented the type of tangible personal property or services it sells, or committed fraud. In the absence of probable cause to believe that the seller made a material misrepresentation or has committed fraud, the seller is not subject to audit of the transactions processed by the certified service provider. A seller is subject to audit for transactions not processed by a certified service provider. The member states acting jointly may perform a system check of the seller and review the seller’s procedures to determine if the certified service provider’s system is functioning properly and the extent to which the seller’s transactions are being processed by the provider.
(B) A person who provides a certified automated system is responsible for the proper functioning of that system and is liable to this state for underpayments of the sales and use tax attributable to errors in the functioning of that system. A seller that uses a certified automated system remains responsible and is liable to this state for reporting and remitting sales and use taxes.
(C) A seller that has a proprietary system for determining the amount of sales or use tax due on transactions and has signed a performance agreement establishing tax performance standards for that system is liable for the failure of the system to meet the performance standards.