Sales Tax Questions
Intermediate Quick Answer

What questions should I ask a new sales tax provider before committing?

⚡ TL;DR

The four questions that expose hidden cost and risk: Are you an SST Certified Service Provider? What are your per-state filing fees for SST vs. non-SST states? Who holds audit liability for SST state returns? What does early termination cost? CSP status alone can represent a $10,000–$40,000 annual cost difference across 24 SST states, and audit liability in SST states belongs to the CSP by program design — not to the seller.

The questions that reveal actual cost, risk, and fit, not the sales pitch. Focus on SST status, fee structure, audit liability, and data portability. These four areas expose most of the hidden cost and switching friction before you’re locked in.

Key takeaways

  • “Are you an SST Certified Service Provider?”: If yes, SST state filing is included at no per-state charge. If no, expect per-state fees for each of the 24 SST states
  • “What are your per-state filing fees?”: Get this in writing, broken out by SST and non-SST states, at your current nexus count and projected future count
  • “Who holds audit liability for SST state returns?”: CSPs hold audit liability in SST states by program design; non-CSP providers pass liability back to you
  • “What is the contract term, and what does early termination cost?”: Avalara commonly uses 1–3 year contracts with significant ETFs; know this before signing
  • “Can I export all historical returns, filing records, and transaction data?”: You need this for future audits; a provider that limits data portability creates lock-in by design
  • “How do you handle calculation accuracy for non-SST states?”: Non-SST states (CA, TX, NY, FL, IL, PA, etc.) require rooftop-level rate accuracy and frequent rate updates; ask specifically about their rate database update frequency and accuracy guarantees

Frequently asked questions

What should I ask a new sales tax software provider?
The most important questions are: Are you an SST Certified Service Provider? What is your per-state filing fee structure (especially for SST vs. non-SST states)? Who holds audit liability for SST state returns? What is the contract term and exit process? Can I export all my historical data? How do you handle calculation and filing for non-SST states?
Why does SST CSP status matter when evaluating a provider?
CSP status means the provider is certified by the SST Governing Board to file on your behalf in all 24 SST states at no charge to you: the states compensate the CSP directly. Non-CSP providers charge per-state filing fees for SST states, which can add $500–$2,000+ per state per year. Over 24 states, CSP status is potentially a $10,000–$40,000 annual cost difference.

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