Reg & Title

Massachusetts SaaS Tax Client FAQ

Issue link: https://resources.dealertrack.com/i/1504648

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FAQ Massachusetts SaaS Tax on In-State Electronic Reg & Title Transactions Q: What is the new tax that will be collected beginning September 5th? A: Some states (coun�es/jurisdic�ons/municipali�es) require ERT vendors to pay sales tax on the Dealertrack fee (shown as part of our OLRS Fee) that a vendor charges a client. Q: Why is this new tax being collected now? A: Cox Automo�ve is always monitoring to ensure compliance. An internal audit revealed that Dealertrack needs to begin collec�ng SaaS sales tax in the state of Massachusetts. Q: When will the new Tax be collected in Massachusetts? A: Beginning September 5th, 2023, Massachusetts registration and title clients will see a tax for each transaction processed displayed in the OLRS Title and Registration Solution Fees screen as "Processing Tax". The Amount will be displayed on internal and client facing forms and reports. Massachusetts clients will see the new empty field titled "Processing Tax" on some reports as early as August 7th, 2023, even though the taxes will not be collected until September 5th, 2023. Q: Will taxes be calculated based on my business' physical loca�on? What happens if we do business outside of Massachusetts? A: Taxes are calculated based on a dealer's physical location. For example if a dealer in Connecticut is using the Massachusetts product, they will not be charged applicable sales tax for their physical location in Connecticut. Q: What if my business is tax exempt? A: If your business is tax exempt, contact our Customer Support team at (800) 374-4771 to ensure that taxes will not be collected on your transac�ons. Q: Can these taxes be passed to the consumer? A: Dealers and users of our products and services subject to fees and taxes (e.g. Saas Tax, etc.) should consult their tax advisors and legal counsel to determine what, if any, taxes and fees may be passed through to consumers. For more informa�on about the So�ware as a Service (SaaS) Tax to be collected on Massachusetts In- State Electronic Registra�on and Title (ERT) transac�ons, refer to the ques�ons and answers below.

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