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Stripe Tax

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Re: Stripe Tax

#141

Post by dbbk »

HatchedLake721 wrote: post #118
jitbit wrote: post #90

So. After 10 years in business and THOUSANDS of customer requests (I even made one myself, in-person when I met Patrick Colison at a conference) Stripe has introduced... a calculator. And you still have to do everything yourself - filing the papers and wiring money. Thanks, but no thanks. I'll stick with my current payment provider that handles _everything_. I do admire Stripe and wish I could move some day :(

What's the other solution? Stripe to become merchant of record like Paddle.com?

I really hate the Paddle UI but this is the sole reason I'm with them. As a solo entrepreneur the peace of mind is just too good.

If Stripe added a Merchant of Record service, as an optional extra, it would be game over and they would win this space.

Re: Stripe Tax

#142

Post by eloisant »

franciscop wrote: post #138

This is so on point. About a year ago I was thinking of opening a company and selling digital products with Stripe in Japan (where I live). They offered a quick free call to answer my questions, and I did so. I am not fluent in Japanese so any help I'm offered I take it, and I wanted to know how many other troubles I could face at this endeavor. All my questions were answered promptly and greatly by them, and I was g…

> Let me tell you I know why you don't see an "Amazon of Japan", apparently in here I'd have to calculate the sales taxes for every country where my products are sold through agreements of Japan-{said country}. Some countries don't even have agreements like Brazil so they are in a gray area.

AFAIK this is true for any other country, not just Japan. If you're in US, and you want to sell and ship products outside of US, you need to take care of the sales taxes and customs for each of the countries you ship.

Or you leave the burden to your customers, but they might not be happy to have to pay expensive custom to the mailman to get their package.

Re: Stripe Tax

#143

Post by mytailorisrich »

staticassertion wrote: post #121
mytailorisrich wrote: post #111

Earlier quoted context omitted.

> The cost of letting Stripe do all the work than moving over to another provider is extremely costly and can damage sales. Yes, that's exactly my point: At some point you are completely locked in with a single supplier that holds your entire income stream and perhaps even more than that. Ideally (easier said that done, I know) you want to have at least 2 suppliers for any key piece of infrastructure as early as poss…

I imagine that most businesses have bigger risks to deal with than this, especially in early to mid stages (where Stripe seems to target).

Perhaps. You should always keep that in mind, though, and avoid building your system tightly-coupled to any single supplier.

Re: Stripe Tax

#144

Post by tzs »

Note that if you are just interested in US sales taxes, and only need to collect tax in the ~1/2 of the states that are part of the Streamlines Sales Tax (SST) project, you can have your tax rate calculation, registration, reporting, and filing all done for free.

The member states of SST have agreed to pay for those services from several tax SaaS companies. (There is one catch: to avail yourself of this, you must collect tax for all SST states, even though you might be below the threshold in some of them).

The companies participating are Avalara, TaxCloud, Sovos, and Accurate Tax.

For small online businesses I suspect that a lot more can take advantage of this than you might expect. Here's a map showing the SST member states [1]. Although it is missing some big states that you probably do a lot of business in (California for instance), a lot of those big states have quite high thresholds for sales or number of transactions before tax kicks in.

Some of the companies that provide the fee SST service will also add non-SST states for a fee. If you only need one or two non-SST states, it will still probably come out cheaper than using Stripe (and will include reporting and filing).

[1] https://www.streamlinedsalestax.org/

Re: Stripe Tax

#145

Post by jnsie »

Naga wrote: post #56

That looks great, but that's a ridiculous pricing scheme. If you invoice $100k in a year, you're paying $4000 to Stripe to manage your sales tax. A lot of the issues with sales tax are not knowing your regulatory requirements and set up. I'd say that's probably worth $4k, but then going forward you still have to pay them that amount. I'd say it would be more worthwhile to pay an accountant to do that for you, and sav…

> I'm going to leave my shame up here but I realize it's $400, not $4000. Just goes to show you that accountants are just like regular people, and that you shouldn't rely on your accountant doing things off the top of their head not using Excel. The order of magnitude difference really shifts my opinion of it.

Fair play to you!

Re: Stripe Tax

#147

Post by jmann99999 »

Our SAAS has to calculate sales tax on the fly for purchases in the US. We don't charge credit cards but invoice the customer later. However, the tax calc is the same. We use an API [1] from a company called Strikeiron that was purchased by Informatica. We pay about $75 per month for tens of thousands of sales tax lookups by city/state/zip.

If we were taking credit cards, we'd look at Stripe's solution. It would be much less expensive than what we are doing today.

[1] https://www.informatica.com/products/data-quality/data-as-a-...

Re: Stripe Tax

#148

Post by nickpp »

Honest question: can somebody enlighten me about Stripe's appeal? I am not an user (until recently they weren't even available in my country) but I used ShareIt (now Digital River) 20 years ago and Avangate (now 2checkout soon Verifone) in the past 15 years and they both:

- had a much larger international presence, with localizations and everything

- had sales taxes, VATs etc computed from day one

- had cart (not sure about ShareIt though) & API

- integrated countless payment gateways: from credit cards to purchase orders, wire transfers and even PayPal

How comes Stripe won even if they arrived much later on the market? I believe their pricing structure was not very far from the competition. What did they offer to attract users even though they lacked such important features?

I want to learn.

Re: Stripe Tax

#149

Post by Silhouette »

ArkanExplorer wrote: post #91
Ndymium wrote: post #51

I have a nano sized business to cover some server costs in Finland. Here are the EU rules as I understand them: * Selling goods - If selling to private persons in European Union fiscal territory (EUFT), add 24% (Finnish VAT). - If selling to businesses in EUFT, no VAT. - If selling to anyone outside EUFT, no VAT, but you may be liable to collect and pay VAT to the customer's country's tax authorities. - Note that the…

You don't need to charge VAT unless you hit these thresholds: https://www.avalara.com/vatlive/en/eu-vat-rules/distance-sel... Which at the lowest end is € 35,000 per country. Countries like the UK for example have a VAT threshold of £85,000 for businesses located inside that country. This is one of the problems of online marketplaces - they have VAT added to them, even when the individual (small) business doesn't nee…

Unfortunately, almost everything you're talking about there is about selling physical goods. The rules for electronic sales have been completely different for quite a few years now and are a labyrinthine mess that makes even professional accountants frustrated and national tax authorities screw up the most basic processes. In most cases, they also don't have any minimum thresholds at all, and the few concessions that have been made are quite recent.

Re: Stripe Tax

#150

Post by chrismorgan »

dstick wrote: post #110
scubakid wrote: post #98

Earlier quoted context omitted.

With this new Stripe solution, do you still have to register for licenses to collect tax everywhere and remit the sales tax to various US states and foreign governments? Unless I misunderstand, that still sounds prohibitively onerous for anyone working as a solo dev or very small team..

Not sure how it works in the US but in the EU you don't have to register anything. Just keep tabs of what VAT you collected for what country, and then pay accordingly afterwards. No licenses needed.

How do they keep track of who you are? I presume you need a VAT ID of some form? (From https://en.wikipedia.org/wiki/VAT_identification_number#VAT_..., it looks like they’ve crafted it so that many countries’ business numbers can be turned into VAT IDs painlessly, e.g. Canada’s work direct, Australia’s you prefix with a two-digit checksum. I note the conspicuous absence of the USA from the list. I have no idea about US tax.)
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