A formal examination conducted by a taxing authority to determine whether sales and use tax has been properly calculated, collected, reported, and remitted.
A complete and traceable record that documents how sales and use tax was determined, billed, reported, and filed for each transaction.
A transaction in which two or more goods or services are sold together for a single price. Sales tax treatment can be complex when a bundle includes both taxable and non-taxable components. In many jurisdictions, the entire bundle may be taxable unless the non-taxable components are separately stated and reasonably priced.
A tax imposed on the consumption, use, or purchase of goods and services, including sales and use tax, rather than on income or profits.
Also known as destination situsing, a method under which sales and use tax is determined based on the location based on the purchaser’s location or the final delivery location of goods or services.
A sales and use tax obligation created when a seller exceeds a state’s statutory sales revenue or transaction threshold, regardless of physical presence.
A retail transaction that is excluded from sales and use tax under applicable law, provided the seller maintains required documentation to substantiate the exemption.
A document issued by a purchaser and accepted in good faith by a seller to support a tax-exempt sale, which must be retained for audit purposes.
The reporting schedule assigned by a taxing authority that determines how often sales and use tax returns must be filed, such as monthly, quarterly, semi-annual, or annually.
The time span covered by a sales and use tax return, such as a month or quarter. Returns are generally due shortly after the end of the filing period, as specified by the taxing authority.
The total receipts from all sales, leases, or rentals before deductions for exemptions, returns, or taxable adjustments.
A sourcing approach where both the origin and destination of a transaction are considered in determining taxability, often resulting in layered or shared tax treatment across jurisdictions.
A tax collected by a seller from a purchaser at the point of sale and remitted to a taxing authority, such as sales and use tax.
A governmental authority with the legal power to impose and administer tax, including states, counties, cities, and special taxing districts.
A sales and use tax imposed by a city, county, or other local jurisdiction in addition to the state sales tax.
A physical or electronic platform through which a seller offers tangible personal property or taxable services for sale, including third-party marketplaces.
A seller that makes retail sales through an unrelated marketplace facilitator that is legally responsible for collecting and remitting sales and use tax on the seller’s behalf.
The level of connection between a seller and a taxing jurisdiction that creates a legal obligation to register, collect, and remit sales and use tax.
A sourcing method under which sales tax is determined based on the seller’s place of business or origin of the sale, rather than the purchaser’s location.
Any person or entity that acquires ownership of or title to tangible personal property through a retail sale for valuable consideration.
A document provided by a purchaser to certify that goods are being bought for resale rather than use or consumption. When accepted in good faith, it allows the seller to make a tax-exempt sale.
A person or business engaged in selling, leasing, or renting tangible personal property to another party for resale, lease, or rental, and not for the purchaser’s own use or consumption.
A sale, lease, or rental of tangible personal property or taxable services to a purchaser for use or consumption, and not for resale.
A tax imposed by a state or local jurisdiction on the retail sale of taxable tangible personal property and certain services, generally calculated as a percentage of the sales price and collected by the seller.
An examination by a taxing authority of a seller’s sales and use tax returns, records, and supporting documentation to determine compliance.
Interest, penalties, or additional assessments imposed when sales or use tax is underreported, misclassified, or not filed or paid timely.
Technology that applies statutory tax rules to transactions, calculates sales and use tax, tracks nexus and exemptions, supports filing, and produces audit-ready records.
An identification number issued to a business that authorizes it to collect and remit sales tax. This number is used by the state to track sales tax activity and filings and may be separate from a federal tax identification number.
A permit or registration issued by a taxing authority that allows a business to legally collect sales tax in a specific jurisdiction.
The process of determining the jurisdiction where a sale is considered to occur for sales and use tax purposes, based on applicable sourcing rules.
Fees charged for delivering or transporting goods. Depending on state law and how charges are stated on the invoice, shipping charges may be taxable or exempt.
The process of determining the appropriate taxing jurisdiction and applicable tax rate for a transaction based on statutory sourcing rules.
An additional sales and use tax imposed by a designated district, such as a transportation, utility, or special assessment district, layered on top of state and local tax.
The portion of a transaction subject to sales and use tax, which may include the sales price, delivery charges, or other amounts as defined by law.
A retail sale, lease, or rental that is subject to sales and use tax under applicable state or local statutes.
A tax imposed on an economic exchange, such as the sale of goods or services, rather than on income or net profits.
The exercise of any right or power over tangible personal property incident to ownership, including storing, consuming, or otherwise deriving benefit from the property.
A tax imposed on the storage, use, or consumption of taxable tangible personal property or services within a jurisdiction when sales tax was not paid at the time of purchase.
A credit or allowance provided by some states to sellers who timely collect, file, and remit sales tax. Vendor discounts are typically available only when filings and payments are made on time.
Turn Definitions Into Defensible Compliance. Understanding sales and use tax terms is the first step. Applying them consistently across transactions, filings, and audits is where risk is reduced.
👉🏻 Talk to a CereTax Specialist about building audit-ready sales tax controls
