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The DMA Way

Completely Compliance- Daily Remittance Programs Arise

by DMA Staff | Jul 03, 2017
DMA_CC_Remittance Program
Two states were considering daily remittance programs in an effort to collect tax more quickly. Connecticut’s SB 1047, which did not pass, would require the taxpayer to engage in a relationship with an electronic payment processing company. As such, the company would automatically collect and remit sales tax to the state on a daily basis. All remittances must be made within 24 hours of the transaction. The state will authorize payment processing companies to provide a service to businesses and will provide a list of approved payment processors annually. In addition, the state would allow the payment processors to keep a portion of the revenue remitted. The bill did not pass regular session, but could appear again in other sessions.

In addition to Connecticut, the Massachusetts House budget also mentions similar legislation with HB 3601. The bill identifies the payment process through third party payment processors and 24 hour remittances (pgs 261-262). While the Senate budget SB 2076 (pgs 374-375) does mention accelerated sales tax remittances, it also states that the commissioner of revenue must determine the most cost-effective method of tax collection, accelerated sales tax remittance or a sales tax prepayment system. Neither of the payment systems apply to businesses who collect less than $750,000 annually. The determination must be made by June 1, 2018.