What could happen to a merchant who doesn’t collect sales tax?
Peterson: A merchant who doesn’t collect sales tax but should faces the possibility of civil and criminal penalties. States are constantly looking for merchants who should be collecting sales tax but are not collecting. In many states a merchant would have to pay back taxes, penalty and interest for several years if a state finds them and determines they should have been collecting sales tax. PeC: Explain the different “models” and what each presents to a seller. Peterson: “Model” is a term we use to differentiate between the types of technology used by merchants to collect sales tax. A Model 1 merchant is one who uses a certified service provider. A Model 2 merchant is one that uses a certified automated system. A Model 3 merchant is one that uses their own self-built technology that is certified accurate by the states.
