141–150 of 613 posts
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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.
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That is the price of doing business with customers of the EU, similar to how you must comply to EU regulations if you want to sell physical goods. In return, you get access to the EU market and can deal with a single ruleset for the whole EU instead of each country individually. Also, this is only for consumers, to business customers you can reverse-charge the VAT so they have to handle it.
Anything can be construed as 'the price of doing business'. If the EU instead required every retailer with at least one customer in the EU to get a tattoo of the EU flag, in return for getting access to the market, would you also consider that just 'the price of doing business'? My objections to this are: - If an EU country is owed tax by people resident within its borders, then perhaps the country's tax authorities…
Online business already have a bunch of advantages over brick-and-mortar, having to keep a database of VAT rates, and then generating a report and sending a few bank transfers is not that onerous in comparison.
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In Colorado you're already asked when filing state taxes what the value of the goods you bought online that haven't been taxed yet, so the onus is on the filer to look up receipts from the year for tax purposes. Amazon already collects tax in Colorado, but a few smaller retailers will send you a letter at the end of the year totaling up your untaxed purchases. Since different counties and localities collect different…
It is not hard to get the right rates. All you need to do is have a master file with all zip codes with the corresponding rate to charge. The difficult part is filing out the returns and dealing with potential audits.
If you are specifically talking about Colorado, you may be right. I'm not familiar with how Colorado does sales tax.
In general, though, zip code is not sufficient. Even if use zip+4 it might not be sufficient. For example, in Washington, people who live in zip 98027-5444 on Renton Issaquah RD SE in the address range 9100-9199 pay 8.6% if their address is even, and 10% if their address is odd. A tax district boundary runs right down the middle of their road.
See this comment from a few months ago explaining in detail how you find the sales tax on a sale in Washington: https://news.ycombinator.com/item?id=16196591
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That sounds harder and more expensive for the business than simply having a standard system to collect and pay the sales tax.
Paying sales taxes online for the one state where I have a business that does retail sales takes between 10 and 30 minutes, depending on how complex that quarter's sales were. Multiply by 50 states, and it's up to 25 hours a month of work. For those of you who have never done this, sales taxes are a lot more complicated than they seem. In the three states where I've had retail businesses, different types of products…
I've worked with a lot of small businesses so I don't mean to disparage things but this seems like a really obvious law that should be enforced.
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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…
That's still difficult to comply with. Imagine 50 different laws like that, each with their own tiers, and consider the difficulty accounting for them all and staying in compliance. That's not even getting into municipal taxes.
If you're making $100k to each 50 states, then you've got $50 Million in Revenue and can afford to do it.
If you've sold 10 t-shirts at $20 a piece, then your total sales of $200 isn't worth bothering with.
If we want there to be problems we can certainly create them, but doesn't seem all that complicated if we want it to work.
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.
My thoughts were that if you bought something from a store it would be x% more expensive with sales tax than purchasing off of amazon and having it delivered without needing to pay sales tax.
This way both have to charge the same sales tax and the difference in price will simply be down to the costs relating to owning a store.
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Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change. Most mom-and-pop online st…
Tennessee also has a "Sales Tax Holiday" on which certain items are tax exempt during certain times (during the holiday). And because we know how much programmers love date and time manipulations, it starts on "the last Friday in July" (I mean, it kinda had to, to be a weekend). [1]: https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax...
Isn't this at some level taxation without representation? If I don't like how some other state is taxing, I can't alter that behaviour by voting. At least in my current state I might have a chance to do so.
>Isn't this at some level taxation without representation? I'm not a fan of the ruling but I would expect the answer to your question would be: "No because you aren't forced to buy the product from a retailer in that state"
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.
Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change. Most mom-and-pop online st…
More than that. Sales tax in California can change arbitrarily, not just by county. E.g. different cities in the same county can have different sales tax. To further complicate things, shipping address may have a city on it but they might not actually "live" in that city.
E.g. in SoCal there is a city of "Westlake Village", which spans the Ventura-LA county border, which technically is a city in LA County, but technically is just a neighborhood within the city of Thousand Oaks in Ventura County.
When I last looked at this a few years ago for a project, for certain problem addresses, no one got them right. Not Macy's, not Amazon, etc.
The only real way to properly calculate sales tax is to geolocate their location.