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Stripe already recommends Avalara and a couple others: https://stripe.com/docs/orders/tax-integration
That seems to only address calculating the tax however. Presumably the business is still expected to remit the tax collected to each tax jurisdiction as required plus whatever necessary paperwork.
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Agreed. I envision "tax compliance as a service" being offered by processors or third parties. My only question is then whether individual municipalities in states that allow them to have their own sales tax will also now be able to force compliance. If that's the case, what a nightmare for online retailers.
That's how large retailers do it already. I worked at a company that created software for calculating sales and use tax for large retailers. It was an incredible headache and I doubt any retailer would do it themselves since they can also point to the vendor as the liable party when a mistake is made, and those mistakes will be made. We even had areas where we could not find the correct tax because the government in…
I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.
The South Dakota tax only applies if you sell more than $100k or send more than 200 shipments, which factored into the decision: Respondents argue that “the physical presence rule has permitted start-ups and small businesses to use the Internet as a means to grow their companies and access a national market, without exposing them to the daunting complexity and business-development obstacles of nationwide sales tax…
I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.
Those same services can also automate your tax filings with each state. It's not free, though.
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It’s good for big business and bad for small businesses because compliance will be tough, and harder to compete and price.
And this is why everyone should be supporting a federal VAT instead. If I'm not mistaken, Amazon had a similar argument a few years ago.
On top of that, lately it seems more challenging not to be an oligopoly if you have customers in Europe and/or the US.
I suppose this represents an opportunity for startups to help other startups to manage compliance and payment.
This is great news for Amazon. They already collect sales tax on everything they sell in most states (47 I think?). Now that smaller sellers (marketplace sellers, eBay, etc.) also have to collect tax, that hurts the ~8% discount built in, so why even shop around?
Most of Amazons sales are through third parties, most of them dont collect.
I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.
The South Dakota tax only applies if you sell more than $100k or send more than 200 shipments, which factored into the decision: Respondents argue that “the physical presence rule has permitted start-ups and small businesses to use the Internet as a means to grow their companies and access a national market, without exposing them to the daunting complexity and business-development obstacles of nationwide sales tax…
I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.
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We’ve been looking at tech solutions for calculation / remittance. So far only found Avalara. I’d be surprised if PayPal, Stripe, and others won’t step into this now that it’ll be fairly profitable.
have been using taxjar.com with... ok results so far - they seem to only provide a sandbox/playground for 'pro' accounts ("call for pricing" - ugh).