Rate Locator System: Due Diligence

If a ZIP+4 area code designation is not available, or if you are unable to determine the ZIP+4 area code designation, you may utilize the tax rate assigned to the five-digit ZIP Code area of the point of delivery. The statutes provide that you may only use the tax rates for the five-digit area if you have used “due diligence” to determine the ZIP+4 designation. You are presumed to have used due diligence if you attempted to determine the ZIP+4 designation by utilizing the address lookup function found on this Web site. The system will generate confirmation numbers that you may wish to keep record of to demonstrate your use of the system. For transactions over $1,000 (not including tax), you are required to keep a receipt, provided by the system, to verify your due diligence.

If the Sales and Use Tax Rate Locator system is not working, you should determine the proper tax rate for each location to which a sale is sourced using the best information available to you. Make a note in your records of the date the system was not working and keep for further reference.