§ 39-15-408 — Seller and third party liability

(a) A certified service provider shall be deemed the agent
of a seller, with whom the certified service provider has
contracted, for the collection and remittance of sales and use
taxes. As the seller's agent, the certified service provider
shall be liable for any sales and use tax due each member state
on all sales transactions it processes for the seller except as
set out in this section.
(b) A seller that contracts with a certified service
provider shall not be liable to the state for sales or use tax
due on any transaction processed by the certified service
provider unless the seller misrepresented the type of items it
sells or committed fraud. In the absence of probable cause to
believe that the seller has committed fraud or made a material
misrepresentation, the seller shall not be subject to any audit
on the transaction processed by the certified service provider.
A seller shall be subject to audit for any transaction not
processed by the certified service provider. The member states
acting jointly may perform a system check of the seller and
review the seller's procedures to determine if the certified
service provider's system is functioning properly and the extent
to which the seller's transactions are being processed by the
certified service provider.
(c) A person that provides a certified automated system is
responsible for the proper functioning of that system and is
liable to the state for underpayments of tax attributable to
errors in the functioning of the certified automated system. A
seller that uses a certified automated system shall remain
responsible and is liable to the state for reporting and
remitting tax.
(d) A seller that has a proprietary system for determining
the amount of tax due on a transaction and has signed an
agreement establishing a performance standard for that system is
liable for the failure of the system to meet the performance
standard.