Stripe Tax • Hacker News Board

Re: Stripe Tax

#241

Post by gamblor956 » Thu, Jun 10, 2021, 4:45 PM UTC

KingMachiavelli wrote: post #205

tzs wrote: post #144

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 co…

Interesting. Why is CO not participating? Looks like every other state is involved to some extent.

CO has a very unique sales tax system: every county, city, and special district can set its own rates, and define taxable (or nontaxable) product categories, and determine the taxability of of those product categories, and even apply special (formulaic) discounts for complying with the tax regime. Plus, a number of tax jurisdictions overlap. And this is the simplified system that the state implemented in 2019 to make things easier for remote sellers in a post-Wayfair world.

And that doesn't even include the roughly 70 home-rule cities which administer their sales tax separately from the state's "simplified" tax system.

For filing purposes, each CO "tax location" is treated as a separate return by Avalara and other sales tax services providers, so the costs can add up very quickly for remote sellers using these services for sales tax reporting compliance: Denver alone has more than two dozen separate "tax locations." Consequently, at my company we use Avalara to compute sales tax for remote sales to CO but file the CO returns ourselves and save several thousand $$$ each month.

Luckily, due to Wayfair nexus requirements, CO sales tax compliance only kicks in at 100k or more in gross sales to CO (not including sales to home-rule cities). Because each home-rule city has its own sale tax system, the nexus threshold is independent for each home rule city; the state has advised these cities to set a threshold of $100k to avoid nexus-related litigation that could result in a bright-line rule setting an undesirably high threshold for nexus.

Re: Stripe Tax

#242

Post by Silhouette » Thu, Jun 10, 2021, 4:45 PM UTC

pier25 wrote: post #214

vvoyer wrote: post #5

I was lucky to be part of the beta for my SaaS ( https://turnshift.app ) and I must say this new feature simplifies things A LOT. Especially as a EU business owner, I previously had to sync every VAT tax rate possible, use a complex workflow to know if a customer needed to pay taxes or not, link tax rates to customers, and create taxes reports for my accountant. Stripe tax does all of that automatically, based on the…

So what are the advantages of Paddle?

Most importantly, they become the merchant of record. In other words, they're a separate legal entity reselling your product to your end customer, and therefore they are the ones who deal with almost all of the corresponding tax and legal responsibilities. You then deal with them through a B2B relationship, in which they give you you the collected revenues minus their fees every now and then, and you provide your product to the customers they've sold it to in return. Your own accounts and tax responsibilities are dramatically simplified as a result, though typically with a merchant of record arrangement (with Paddle or any other) you trade that off against some loss of control and higher fees.

Re: Stripe Tax

#243

Post by bpicolo » Thu, Jun 10, 2021, 4:48 PM UTC

nickpp wrote: post #184

hobofan wrote: post #179

Earlier quoted context omitted.

Sales tax is not a "I need this at launch" feature. Many companies start out in a single market where you can just hardcode the tax rates if you want, and worry about that later (and then the engineering hours to add sales tax etc. are probably not a threat to your existence).

Gotcha. My products were addressing the global market from day 1 so the ability to automatically send an invoice with a correctly calculated sales tax to buyers from any country on the planet seemed vital. Let's also not forget about collecting and remitting said tax to correct tax authorities...

There were companies that filled that gap, like Taxjar (now acquired by Stripe)

Re: Stripe Tax

#244

Post by SiempreViernes » Thu, Jun 10, 2021, 4:51 PM UTC

rriepe wrote: post #230

tomtheelder wrote: post #225

Earlier quoted context omitted.

And even if you somehow DID believe that governments never create wealth, you'd need to have also convinced yourself that they can do no good aside from wealth creation. Or possibly that there IS no good aside from wealth creation. Regardless of what it is, it is a viewpoint totally divorced from reality.

I'm right here. I'm a human. You can e-mail me. I'm a person!

No offence but "you can e-mail me" is not the most persuasive argument for possessing personhood I've heard.

Anyway, I don't think people doubt your humanity, just your sincerity.

Re: Stripe Tax

#245

Post by evangow » Thu, Jun 10, 2021, 4:52 PM UTC

I'm not seeing anything here about generating VAT-compliant invoices here or in the documentation.

Different countries have different requirements for what must be included on the invoice and specific language to use (e.g. how a reverse-charge is supposed to be worded).

There's a great overview on this here: https://github.com/wbond/vat_moss-python/blob/master/overvie...

Re: Stripe Tax

#246

Post by rriepe » Thu, Jun 10, 2021, 4:57 PM UTC

SiempreViernes wrote: post #244

rriepe wrote: post #230

Earlier quoted context omitted.

I'm right here. I'm a human. You can e-mail me. I'm a person!

No offence but "you can e-mail me" is not the most persuasive argument for possessing personhood I've heard. Anyway, I don't think people doubt your humanity, just your sincerity.

You're a bigot.

Re: Stripe Tax

#247

Post by spockz » Thu, Jun 10, 2021, 5:04 PM UTC

gamblor956 wrote: post #235

tzs wrote: post #188

Earlier quoted context omitted.

I'm somewhat baffled by California not being a member. California's threshold below which out of state remote sellers do not have to register, collect, report, or remit sales tax is $500 000/year of sales into California. If I'm a remote seller using the free SST option to handle my taxes in the SST states, and am selling say $300 000/year in California, I will not be collecting any California tax. If they joined SST…

California is not a member of the SST because it does not currently tax a number of things that are subject to tax under the SST regime. For example, digital goods are taxable in SST states but not in California. Similarly, there are a number of other product categories where CA's taxability classifications do not match the SST's classifications. Generally, the total tax they could collect from remote (non-CA) seller…

Interesting. People bemoan that the market in Europe is too splintered and that the whole of the us can be seen as one market. But all these state differences seem to at least indicate that it isn’t that simple.

Re: Stripe Tax

#248

Post by gamblor956 » Thu, Jun 10, 2021, 5:04 PM UTC

R0b0t1 wrote: post #218

comex wrote: post #185

Earlier quoted context omitted.

That used to be the law, but is no longer as of 2018: https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc .

A bad ruling. To let it stand, the more reasonable interpretation is that the purchaser has to remit sales tax to their own state. But it may not stand on further challenge. For example, why should the state the items are leaving not be entitled to sales tax?

The law already was that the purchaser should remit use tax to the state for purchasers from out-of-state vendors.

But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales, much less what rate would apply. Sales tax is basically use tax, but with the burden of compliance placed on the seller.

As for why the sellers' state is not entitled to sales tax: in the old-time days, pre-Amazon, this was how many (but not all) tax jurisdictions determined sales tax. (For example, CO's sales tax regime pre-Wayfair used to use the seller's address to determine tax rates.) But the rise of Amazon and online sales meant that sales tax would go to a few jurisdictions where the sellers were located, rather than be spread out where the buyers were located. As sales tax pays for things like roads, etc., that these remote sellers used, many jurisdictions thought this was unfair, and moved to change sales tax sourcing to destination-based sourcing (i.e., to taxing based on the customer's location). And in the Wayfair decision, SCOTUS said this was acceptable. (At the national and international level, destination-based sourcing has been the law for decades, and has been part of America's tax treaties dating back to at least the 1970s.)

Re: Stripe Tax

#249

Post by corentin88 » Thu, Jun 10, 2021, 5:12 PM UTC

kmoriarty wrote: post #217

corentin88 wrote: post #190

Earlier quoted context omitted.

That’s also on top of Stripe Checkout (0.5%) and on top of Stripe Radar (0.5%). Stripe cuts about 5% of every SaaS in the end. That’s a lot of money.

Hey! Kelly from Stripe here: Just to clarify, there's no additional cost for using Checkout, and Radar is per small per transaction fee (or included free with Stripe if you're just starting out!), not a variable 0.5% fee.

Thanks for clarifying! That’s something I was looking at on the landing page and didn’t find that. So Checkout already includes Stripe Tax at no additional cost. That’s great to hear

Re: Stripe Tax

#250

Post by fastball » Thu, Jun 10, 2021, 5:14 PM UTC

kmoriarty wrote: post #166

fastball wrote: post #137

Our company was part of the beta and we were having buggy issues when trying to use Stripe Tax alongside the Customer Portal, which AFAIK they haven't resolved yet. So just FYI if you implement and bump into this, it's them not you.

We shipped customer portal support a few weeks ago, apologies for not following up and letting you know! If there were any other issues though, do let me know -- kmoriarty@stripe.com

Hey! The issue we were having was related to customers being unable to change their subscriptions through the Portal with Tax enabled, which I just tested and still seems to not work. I've sent you an email so hopefully we can figure this out.