§ 57-39.4-35 — (502) State review and approval of certified automated system software and certain liability relief

North Dakota § 57-39.4-35

• Jurisdiction: North Dakota
• Title 57: Taxation
• Ch. 57-39.4: Streamlined Sales and Use Tax Agreement

Text

and certain liability relief.
1. Each member state shall review software submitted to the governing board for
certification as a certified automated system as provided for in this chapter. Such
review shall include a review to determine that the program accurately reflects the

taxability of the product categories included in the program. Upon approval by the
state, the state shall certify to the governing board its acceptance of the system
determination of the taxability of the product categories included in the program.
2. Each member state shall relieve certified service providers and model 2 sellers from
liability to the member state and local jurisdictions for not collecting sales or use taxes
resulting from the certified service provider or model 2 seller relying on the certification
provided by the member state.
3. Each member state shall provide relief from liability to certified service providers for
not collecting sales and use taxes in the same manner as provided to sellers under the
provisions of section 57-39.4-18.
4. The governing board and the member states shall not be responsible for classification
of an item or transaction within the product categories certified. The relief from liability
provided in this section shall not be available for a certified service provider or model 2
seller that has incorrectly classified an item or transaction into a product category
certified by a member state. This subsection shall not apply to the individual listing of
items or transactions within a product definition approved by the governing board or
the member states.
5. If a member state determines that an item or transaction is incorrectly classified as to
its taxability, it shall notify the certified service provider or model 2 seller of the
incorrect classification. The certified service provider or model 2 seller shall have ten
days to revise the classification after receipt of notice from the member state of the
determination. Upon expiration of the ten days, the certified service provider or
model 2 seller shall be liable for the failure to collect the correct amount of sales or use
taxes due and owing to the member state.
6. For purposes of this section:
a. "Certify a product category" means the state reviews the product category and
determines that the taxability of a product properly included in that product
category is consistent with that state's laws. The state certifies that the taxability
is based only on:
(1) The product-based exemptions or impositions provided by state law;
(2) The specific description provided by the seller or certified service provider;
and
(3) Not requiring either the purchaser or seller to produce documentation to
claim the exemption.
b. (1) "Product category" means:
(a) Terms specifically defined in appendix C, part II or part III of the
agreement, such as clothing, durable medical equipment, food, drugs,
soft drinks, and disaster preparedness supplies;
(b) Subcategories of terms specifically defined in subparagraph a that
may be taxed differently than the product category as a whole, such
as oxygen delivery equipment, kidney dialysis equipment, prewritten
computer software delivered electronically, and prepared food that
requires additional cooking by the consumer;
(c) Terms representing groups of like products that do not fall within
subparagraph a or b, such as other digital products, building materials,
furniture, or motor vehicles; and
(d) Subcategories of subparagraph c that are taxed differently than the
product category as a whole, such as printed materials, newspapers,
and catalogs.
(2) The term does not include any individual product that properly falls within
any product category in a state, such as shirts, reusable thermometers,
ultrasound machines, bread, tables, chairs, automobiles, or motorcycles,
unless the individual product is taxed differently than any other products
within that product category; or "tangible personal property".