Billing sales tax: Frequently asked questions (FAQ)
A Vendor Pay account may be subject to state and local sales taxes. We determine the applicable sales tax for your organization based on your billing address.
Jump to:
- What Vendor Pay products and services may be subject to taxes
- Why are you starting to collect sales taxes now?
- When does this go into effect?
- Do I qualify for a tax exemption?
- How does this impact me?
- How do I know if my Vendor Pay account will incur state and local taxes?
- How is tax calculated?
- How will I be billed for taxes?
- How do I find and validate my billing address?
- Do you keep the taxes?
What Vendor Pay products and services may be subject to taxes
- Subscription fees
- Transaction fees
- Service fees (Check Void fee, Pay Faster fee, etc.)
- Support fees
- Fees for future products and services
Important: Contact your tax advisor with any questions about a tax exemption.
Why are you starting to collect sales taxes now?
The 2018 US Supreme Court decision in South Dakota v. Wayfair changed a long-standing rule, and as a result, states can require businesses to collect sales tax on out-of-state sales. This means that while we may not have been required to collect sales tax in the past, this requirement has changed.
When does this go into effect?
If applicable, we will begin collecting sales tax starting with your June 2020 billing statement (for your May subscription period).
Do I qualify for a tax exemption?
Subject to state and local tax regulations, certain organizations may be exempt from sales tax. Please contact your tax advisor with any questions about a tax exemption.
If you believe your organization qualifies for sales tax exemption, please submit your request for exemption through the Sales Tax Exemption Request form for us to review.
How does this impact me?
The billing address on the account determines whether your Vendor Pay account is subject to applicable taxes.
How do I know if my Vendor Pay account will incur state and local taxes?
Applicable taxes will be included in the monthly billing statement in your Vendor Pay account.
As of September 15, 2024, the following states and jurisdictions are requiring us to collect sales tax:
| Arizona (AZ) | Ohio (OH) |
| Denver, Colorado (CO) | Pennsylvania (PA) |
| Lakewood, Colorado (CO) | Puerto Rico (PR) |
| Connecticut (CT) | Rhode Island (RI) |
| Washington, DC (DC) | South Carolina (SC) |
| Hawaii (HI) | South Dakota (SD) |
| Iowa (IA) | Tennessee (TN) |
| Illinois (IL) | Texas (TX) |
| Kentucky (KY) | Utah (UT) |
| Maryland (MD) | Vermont (VT) |
| Massachusetts (MA) | Washington (WA) |
| New Mexico (NM) | West Virginia (WV) |
| New York (NY) |
For more information, please contact your tax advisor or the appropriate tax authority in your jurisdiction.
How is tax calculated?
Any applicable sales tax for your organization is determined based on the billing address listed in the Company Profile of the Vendor Pay account and the applicable tax rate in that jurisdiction.
How will I be billed for taxes?
The billing process will not change. Applicable taxes will be included in the monthly billing statement in your Vendor Pay account. To view your billing statement:
- Login to your Vendor Pay account
- Select Settings
- Select Statements, under Your Account with Us
How do I find and validate my billing address?
The billing address is displayed on the Company Profile page of the Vendor Pay account. To view your Company Profile:
- Login to your Vendor Pay account
- Select Settings
- Select Profile under Your Company
- View the address listed as Company Location
If an alternative location is provided as the Mailing Address, it will not determine or impact eligibility for taxes.
Do you keep the taxes?
No, these taxes are collected and remitted to the appropriate tax authorities, as required.
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