New US sales tax regulations have recently been introduced requiring Rentec Direct to collect sales tax from clients who do business in a state that requires you to pay sales tax.
Rentec Direct will be including applicable state sales tax to your invoice for products you purchase from Rentec Direct such as property management software and tenant screening services. This is in compliance with US sales tax regulations, referred to as the Remote and Online Seller Tax Rules.
Note: Not all states yet require remote software companies, like Rentec, to collect tax. If you are in a state that has sales tax on software as a service (SAAS), until sales tax appears on your invoice, you should continue self-reporting as usual.
How much State Sales Tax will I be required to pay?
If applicable, the sales tax rate will be determined by your billing address found under your Contact Info in the Settings Tab of your Rentec Direct account. Some states only tax software, other states tax tenant screening services, and still others might tax both. Your sales tax will be calculated based on the latest rate tables for your state to ensure proper calculations. Your state or local government determines the actual rate.
Does this mean I’m paying more?
No, your net costs should remain exactly the same. The only thing that is changing is your state now requires us to collect and remit your sales tax rather than you self-reporting those purchases. This change should actually save you time and energy.
So what’s changed and why does Rentec now pay my state sales tax?
Over the past year, sales tax law has changed in the US to allow states to require out of state companies to charge and collect sales tax on most purchases. This stemmed from a case that South Dakota spearheaded to the supreme court last year. In the wake of this case, many sales tax states have amended their laws to require out of state companies to collect and remit taxes. For more information, look at South Dakota v. Wayfair.
So whether you buy software from Rentec Direct, Google, Amazon, Acme Software Corp, or any other software company, if you are in a state that taxes software or screening products, that company is now obliged to collect and remit sales taxes on those sales.
If you believe your organization qualifies for a tax exemption (for example, because you are nonprofit or government status), you can submit a current tax exemption certificate to Rentec for review. Please send this documentation to firstname.lastname@example.org