GetProspect has to collect and pay the Sales Tax at the moment of purchase.
The verdict of the US Supreme Court (South Dakota v. Wayfair, Inc.) ruled that each state can mandate that businesses without a physical presence have to collect and remit sales taxes on transactions in the State.
By now, the rule is applied only in several States, and some of them decided not to tax SaaS companies. One more condition: the sales tax is collected when GetProspect reaches thresholds (dollar or number of transactions) that are different to each State. The threshold refers to sales for the last 12 months, so it may occur that one month we collect the tax from you, and the other we don’t.
At present, we check the Sales Tax rates applicable to your company and update your invoice correspondingly before each subscription or renewal.
Contact us if you have any questions left! Legal issues are very important to clarify properly.