(a)  A certified service provider shall be the agent of a 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 shall be liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this section. A seller that contracts with a certified service provider shall not be liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller shall not be subject to audit on the transactions processed by the certified service provider. A seller shall be subject to audit for transactions not processed by the 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 certified service provider.

Terms Used In Rhode Island General Laws 44-59-9

  • Agreement: means the Streamlined Sales and Use Tax Agreement. See Rhode Island General Laws 44-59-3
  • Certified Automated System: means software certified jointly by the states that are signatories to the Agreement to calculate the 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 Rhode Island General Laws 44-59-3
  • Certified Service Provider: means an agent certified jointly by the states that are signatories to the Agreement to perform all of the seller's sales tax functions. See Rhode Island General Laws 44-59-3
  • Fraud: Intentional deception resulting in injury to another.
  • Person: means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity. See Rhode Island General Laws 44-59-3
  • 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 Rhode Island General Laws 44-59-3
  • State: means any state of the United States and the District of Columbia. See Rhode Island General Laws 44-59-3
  • Use Tax: means the tax levied pursuant to the provisions of chapters 18 and 19 of this title. See Rhode Island General Laws 44-59-3

(b)  A person that provides a certified automated system shall be responsible for the proper functioning of that system and shall be liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system shall remain responsible and shall be liable to the state for reporting and remitting tax.

(c)  A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system shall be liable for the failure of the system to meet the performance standard.

History of Section.
P.L. 2001, ch. 172, § 1.