CCH has undertaken a nationwide research project on the sales and use tax treatment of drop shipment transactions, and used the information to update its tax research.

Based on information from a new survey of state tax administrators in the 45 states with a sales tax, as well as the District of Columbia, the information has been incorporated in the “Drop Shipments: Taxation, Compliance and Planning” and “Diane Yetter’s Drop Shipments Smart Chart” sections of  the CCH Sales Tax Research and Compliance Manager.

The research presents each state’s rules with references to the statutes and regulations defining the increasingly common and complex area of sales and use tax treatment of drop-shipment transactions.

The information was prepared with the help of Diane Yetter, president of Yetter Consulting Services, and founder of the Sales Tax Institute in Chicago, the survey information is included.

“Unfortunately, the states don’t have clear guidance on some of the nuances related to the tax rules for drop shipments,” Yetter said in a statement. “Our analysis of their answers ensures that the states’ responses are consistent and make sense to any level of user.”

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