Sales Tax Notification - CIRCLE TRACK WAREHOUSE | PERFORMANCE RACING DISTRIBUTOR

Important Sales Tax Notification

ECOMMERCE FULFILLMENT

Dear Motor State Distributing Customer,

Across the country, states have been changing their sales tax collection requirements to address web-based and drop-ship type sales. This has led to significant changes in how businesses have to collect sales tax, including for states where they don’t have a physical presence such as a storefront or representative.

Because Motor State Distributing operates in all 50 U.S. states, we are required to collect and remit sales and/or use taxes on orders shipped to or on behalf of (for example, fulfillment or drop-ship orders) our customers to any state that collects sales tax, unless that customer has provided us with a sales tax exemption certificate or affidavit for that state. For some customers, this may require filing a separate exemption certificate for each state to which they ship. For customers who sell through Marketplace Facilitators such as Amazon, eBay, Walmart.com, and others, those Marketplace Facilitators will typically collect and remit sales tax on purchases sold through their services.

In the near future, Motor State Distributing will begin collecting sales tax on orders for customers who do not have a current sales tax exemption certificate or affidavit filed with us for each state that we ship to on their behalf.
We respectfully request that you complete the necessary form(s) applicable to your business and return them to us as quickly as possible. If you do not complete and return these forms prior to the date when we begin collecting sales tax on all non-exempt sales, your account will be listed as taxable for orders. These forms can be downloaded from the Motor State website with the following links:

Please email the completed form to [email protected], or fax it to us at (269) 593-5918. For questions, please review our FAQs.

If your business is purchasing products solely for direct use rather than resale and your purchases are taxable, or you are no longer purchasing products through Motor State Distributing, please complete and sign the following letter and return it to us via fax at (269) 593-5918 or email at [email protected] so that we can remove you from our sales tax notification process.

Taxable or No Longer Purchasing

Please feel free to contact me if you need further assistance regarding certification of your tax-exempt status with Motor State Distributing.

Thank you,

Joseph Cleary
Staff Accountant
Motor State Distributing

Frequently Asked Questions

“Why am I being charged sales tax? I am not the end user of the product / I don’t have nexus* in the ship-to state / I’ve made minimal sales to some or all of the impacted states.”
- Under state law, all sales are presumed to be sales to (taxable) end users unless the purchaser provides a valid sales tax exemption certificate to the seller.
- In addition, sales taxes are governed by the shipment location even if the reseller of the goods is located in a different state than the shipment state.
- Because Motor State has established sales tax nexus* in all states that impose a sales tax, we are required to charge sales tax on all sales shipped to states that impose a sales tax unless a valid exemption certificate – as defined by the ship-to state – is provided to us.
- Thus, even if your Company does not have sales tax nexus* with a state that imposes a sales tax, Motor State is still obligated under law to collect a valid exemption certificate or charge sales tax.
*Nexus = a sales tax collection and filing obligation imposed by the state.

“What exemption certificate(s) am I required to provide to Motor State?”

We will accept the following properly filled exemption certificates, by state, based on the state in which we are shipping product on your behalf:

“Ship-to” State	Form Accepted
California	Form CDTFA-230 REV. 1*
District of Columbia	Form OTR-368*
Florida	Form DR-11*
Hawaii	Form G-17*
Illinois	Form CRT-61*
Indiana	SST Exemption Certificate
Louisiana	Form R-1064**
Maryland	*
Massachusetts	Form ST-4
Mississippi	Copy of state-issued permit
New York	Form ST-120
Pennsylvania	Form REV-1220*
South Dakota	SST Exemption Certificate
Tennessee	Copy of state-issued permit*
Vermont	SST Exemption Certificate
Virginia	Form ST-10
West Virginia	SST Exemption Certificate
Wyoming	SST Exemption Certificate
ALL OTHER STATES****	Multistate Tax Commission Uniform Resale Certificate***

* In lieu of the state-specific form, an in-state sales tax ID (requiring registration) may be provided on the Multistate Tax Commission Uniform Resale Certificate.

** If applicable, a letter stating that the purchaser does not have Louisiana sales tax nexus may be provided in lieu of Form R-1064.

*** The Multistate Tax Commission Uniform Resale Certificate may be used showing the purchaser’s sales tax identification number from any state.

**** Alaska (state), Delaware, Montana, New Hampshire, and Oregon do not impose a sales tax.

“Why am I required to provide an exemption certificate for states I’m no longer selling into?”
1. Most states hold both the seller and the purchaser jointly liable for prior period taxable sales not covered by an exemption certificate. As such, an exemption certificate is required to cover sales tax liability from prior period sales.
Which states are impacted?”
- Effective June 15, 2021, charges to the following states, based on the states in which we are shipping product on your behalf, will reflect sales tax unless a valid exemption certificate is provided to us:
  • District of Columbia, Idaho, Hawaii, and New Mexico
- Motor State will send additional communication prior to beginning to charge sales tax in any other states.
“Motor State’s competitors aren’t charging sales taxes. Why is Motor State beginning to do so?”
- Based on informal conversations with other leaders in the industry, many of our competitors are beginning to comply with sales tax obligations including collecting exemption certificates and, if not received, either collecting sales taxes or rejecting orders. However, even if our competitors choose to delay compliance, we are still under obligation to begin charging sales taxes.
- Finally, it should be noted that most states hold both the seller and the purchaser jointly liable for any unpaid sales/use taxes; thus, if one of our competitors does not charge sales tax, most states are legally able to assess you/your customer for the “use” tax in the absence of the sales tax being charged.
“What information is generally required on a valid exemption certificate?”
- The following information is generally required on each exemption certificate to be accepted by Motor State:
  - Certificate scope (blanket or single-use):
    - A blanket certificate can be used for all transactions with NMI on exempt purchases to the ship-to state. In most cases, “blanket” should be selected. Single-use, as the name suggests, is only valid for a single transaction.
  - Signature of authorized person, title or position with the company, and signature date
  - Seller’s details:
    - Lane Automotive, Inc. (dba Motor State)
      8300 Lane Drive
      Watervliet, MI 49098
Should I send my tax exemption forms to Motor State directly?
- Yes. The information should be submitted to [email protected] for volume, capacity, and expertise reasons. In some instances, the information can be handled manually by a Motor State team member.
I am running a cash business and doesn’t report anything to the IRS, so I don’t have a tax number, and I don’t want to pay sales tax.
- Motor State is required to collect sales tax for customers that do not have a valid Sales Tax Exemption on file.
How quickly can I expect a response to questions?
- Voicemails are responded to by noon of the following business day.
- E-mails are responded to within 48 hours.
I no longer ship to a state(s) for which Motor State is requesting exemption forms:
- We are requesting exemption forms from customers based on ship-to states effective starting January, 2018.
- As a result, you may not longer ship to that state, but if you did ship to that state at any time after January 1st, 2018, the requested forms still need to be submitted.

If you have any further questions, please email [email protected].