FREQUENTLY ASKED QUESTIONS - U.S. SALES TAX (As of April 2, 2019)
PLEASE NOTE - Lightning Source is the Ingram business entity that supports the IngramSpark service. IngramSpark and Lightning Source are one and the same for purposes of the FAQs.
Q: How Does U.S. Sales Tax Affect Me?
--U.S. sales tax affects you if you place orders with Lightning Source LLC for delivery to a U.S. address.
--Sales tax is a transaction-based tax charged upon the sale of most products in 46 U.S. states. Sales tax is a state tax, not a federal government tax, and as a result, is different in each state.
--Most printing fees are taxable in most states unless exempt. See below for documentation requirements for exemption claims.
--If your only sales to the U.S. are through Lightning Source’s wholesale channel partners (to retailers and libraries), U.S. sales tax will not be charged for the printing of these orders.
Q: I’m not in the US. Is this applicable to me?
A: Yes, if you place an order through your Lightning Source account to have books printed and delivered to an address located in the United States.
Q: What is changing? Lightning Source already collects sales tax, right?
A: Yes, Lightning Source collects sales tax in fourteen states, but due to legislative and procedural changes brought about by a United States Supreme Court ruling last year, Lightning Source will be collecting and reporting sales tax in 32 additional states within the United States, effective July 1, 2019.
Q: What is the deadline to have all tax documentation submitted to Lightning Source to avoid being charged sales tax on July 1, 2019?
A: All tax documents should be submitted through your Lightning Source account by May 15, 2019.
Q: In which states will Lightning Source be required to charge sales tax (if tax exemption documentation is not provided)?
A: Lightning Source will be required to charge sales tax for orders you have shipped to the following states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. Scroll to the bottom of this article for a list of the states, their tax and contact information.
Q: Do I have to pay sales tax on Title Setup, Revision, or Market Access fees?
A: No. Sales tax applies primarily to the printing fees.
Q: What do I need to send to Lightning Source to be exempt from paying sales tax?
A: You will need to submit updated sales tax exemption documentation (see below for instructions). You may be exempt from paying sales tax if you are purchasing the products and services for resale or if you are an exempt entity (ex: a governmental, educational, charitable, or nonprofit organization).
Q: I have already uploaded my tax exemption documentation. Do I need to resubmit it?
A: If you claimed a sales tax exemption prior to April 1, 2018, you will need to resubmit your information to be eligible for tax exemption. Please follow the instructions further below to complete and submit your tax exemption.
Please follow the instructions below to verify that the entry date of your previously uploaded tax exemption documentation is April 1, 2018 or later.
1. Click the dropdown button in the account information section in the upper right-hand side of your account page and select “Paperwork.”
Any previously uploaded tax information will be displayed in the “My Paperwork” section of your account along with the date of upload.
Q: What happens if I do not submit updated sales tax documentation?
A: Without updated sales tax exemption documentation, sales tax will be collected on future publisher direct orders in the states where Lightning Source is obligated.
Q: Can I get a refund for any taxes paid before I submit my tax exemption documentation?
A: No. Lightning Source is obligated to collect taxes on all applicable items until tax exemption paperwork is on file. To avoid paying unnecessary taxes, make sure you submit your paperwork by May 15, 2019.
Q: Can I mail or fax a copy of my tax exemption certificate to my Lightning Source rep?
A: To ensure you have the correct paperwork for all states in which you are eligible, we highly recommend submitting your exemption documentation through your account on the Lightning Source website.
Q: If I have resale tax exemption documentation for one state, do I have to pay taxes in other states?
A: There are 38 states that accept “Home State” documentation as valid resale exemption documentation. This means that if you have submitted to Lightning Source the necessary paperwork for resale tax exemption, you may also be eligible for resale tax exemption in other states with the completion of a Reseller Affidavit. (See “What is a Reseller Affidavit?” for more information on Reseller Affidavits.) **Please note; the Reseller Affidavit is not a resale tax exemption document and must accompany resale tax exemption documentation for at least one state (forms provided on the website).
All states that have sales tax other than California, Connecticut, District of Columbia, Hawaii, Massachusetts, Maryland, Mississippi, and Tennessee allow a Home State registration to certify a sale for resale if documented properly.
For Foreign Publishers, “Foreign” means your country of residence is not in the United States, 37 states will allow a Foreign Reseller Exemption if documented properly. All states that have sales tax other than California, Connecticut, District of Columbia, Hawaii, Massachusetts, Maryland, Mississippi, New Mexico, and Tennessee allow a “Foreign” registration to certify a sale for resale if documented properly.
Four states—Illinois, New York, Pennsylvania, and Virginia—require their own state-issued form, in addition to the Reseller Affidavit, to be completed to document a “Home State” exemption. Forms for these states, as well as the Reseller Affidavit, can be found on the Lightning Source website.
Q: Why do I have to fill out forms for Illinois, New York, Pennsylvania, and Virginia if I’m not in any of those states?
A: These states require their own state-issued form, as well as the Reseller Affidavit, to be completed to document an exemption.
The following items must be completed on each applicable form:
Line 7 – Check part 1
Sign and date in Step 5
Complete Part 2 (check Box D)
Provide state and registration numbers in the appropriate sections
If applicable, check the following statement in Box 7: “The purchaser makes no taxable sales/not required to hold a PA Tax License. Property sold in the regular course of business.”
Sign and date at the bottom
Check Box 1
Provide registration number and the state where you are registered
Date and sign
Q: How do I know if I’m eligible to claim an exemption based on resale?
A: With resale certificates, someone purchasing goods to resell may be exempt from paying sales tax on those items. The tax exemption applies only to the goods to be resold, not other items purchased for use by the business. To claim an exemption based on resale, you must provide a properly completed resale certificate for all states where you are licensed (have a sales tax license/permit for sales tax collection and reporting from that state as a reseller).
Q: What May Qualify for Sales Tax Exemption?
Exemption based on purchase for resale
Purchases by United States Government organizations
Purchases by States and/or political subdivisions thereof
Purchases by Non-profit for religious, charitable, or educational organization
Purchases by the United Nations and other international organizations
Q: What is the Reseller Affidavit?
A: The Reseller Affidavit is a legal document declaring the states in which you are registered for sales tax remittance. A Reseller Affidavit must be properly completed and submitted to Lightning Source for “Home State Exemption” rules to apply. The Reseller Affidavit is provided through the Lightning Source website and should be used to ensure that all the necessary information is provided.
For “Foreign” Publishers, the Reseller Affidavit is a legal document declaring that you are not registered nor required to be registered for sales tax in any states, but that you are a legal business operating in a foreign country and purchasing the products and services from Lightning Source for resale. A Reseller Affidavit must be properly completed and submitted to Lightning Source for “Foreign Reseller Resale Exemption” rules to apply. The Reseller Affidavit is provided through your account on the Lightning Source website and should be used to ensure that all necessary information is provided.
An online version is available through the Lightning Source website and will allow you to provide the necessary information, which is carried to in the appropriate resale certificate forms. If the Reseller Affidavit is not properly completed or if it is not submitted to Lightning Source, then only those states where you have provided a valid resale certificate will be exempt from sales tax.
Q: What if I am claiming an exemption based on my entity status (governmental, educational, charitable, or nonprofit organization)?
A: If you are claiming an exemption based on being an exempt entity, you will need to provide Lightning Source with the documentation issued to you by the state(s) documenting your exemption. Most states require an exempt organization to register in the state before an organization can claim a sales tax exemption.
Documentation required for sales tax exemption based on entity status varies by state. If you are an exempt entity, Lightning Source will review your submitted documentation and notify you if it is not accepted for tax exemption.
Q: I am tax-exempt. How do I submit my documentation?
INSTRUCTIONS TO SUBMIT TAX DOCUMENTATION
Step 1: Log in to your Lightning Source account
Step 2: From your main dashboard, click on your account information in the top right corner and choose “Tax Information” from the dropdown menu
Step 3: Click the “Claim US Tax Exemption” button
Step 4: Select your basis for claiming a tax exemption. Any option other than “Claiming exemption based on resale” will require further review from our finance department and we’ll get back to you.
Step 5: If you selected “Claiming exemption based on resale” from the previous screen, click on the state(s) where you are exempt and enter the registration number from your resale certificate.
Step 6: Carefully review this screen with information on downloading and completing the appropriate forms, as well as the instructions for uploading the completed forms through the website
Step 7: Fill out and upload the forms to your Lightning Source or IngramSpark account for review.
Please make sure you understand the filing requirements for any exemptions you may claim.
Q: Will I be notified after my tax forms have been reviewed?
A: After you upload the forms the finance department will review them to determine if they meet the requirements for tax exemption. If they do, the forms will become visible in your account once they have been reviewed and loaded into our system. Finance will contact you if additional information is needed.
Until the forms have been reviewed and approved, any print orders you place will be subject to sales tax, which cannot be refunded.
Q: Where Can I Find Out More about Tax Exemptions?
A: For more information on tax exemptions and whether or not you are eligible, consult your tax advisor or the Department of Revenue for the states in the U.S., in which you conduct business. A reference list of each's state's tax information can be found here.