Stripe Tax

For example, according to Oxford dictionary https://www.oxfordlearnersdictionaries.com/definition/englis... "used to emphasize a word or phrase, even if it is not actually true in a literal sense" or Merriam Webster https://www.merriam-webster.com/dictionary/literally "used in an exaggerated way to emphasize a statement or description that is not literally true or possible" ; in modern usage, "literally" can be it's own antonym and mean "not literally". Language is fun! :)

Regardless of sales volume, such businesses were not obliged to file VAT in EU before and will not be after the changes either - they will now be able to file IOSS VAT returns if they wish, though.

The annual thresholds the linked article talks about are all concerning intra-EU cross-border sales, not imports.

It can, but then your customers get hit with varying exchange rates and potentially high conversion fees on their side. This will not make you popular with your international customers, at least the ones who didn't already back out when they saw a foreign currency anyway. Depending on which research you read, the rate of lost conversions due to lack of local pricing could be as high as 50%.

Within the overall landscape of payment processing options, Stripe looks trapped in an awkward middle ground now.

Above them are the merchants of record. Including currency conversion, international sales using Paddle seem to cost 7% + 35p at current USD/GBP exchange rate and their standard published pricing. But for that, you get real tax compliance.

Then we have Stripe, coming in at 5.9% + 20p (4.4% + 20p for European cards). Even with Stripe Tax, you're missing much of the essential functionality for global tax compliance and the reassuring liability shift, so that extra 1.1% + 15p or even 2.6% + 15p would be the easiest sale since bottled water in a desert to a lot of merchants.

Further down the price spectrum, we have services like GoCardless that are offering direct payment schemes rather than cards (duh) but for a fee of only 2% + 20p including currency conversion. You don't get any built-in tax support here, so it would be fairest to compare with Stripe at 5.4% + 20p or possibly 3.9% + 20p, but that's still quite a difference. And while you have to do your own tax compliance as with all payment processors using this model, you do get other benefits, notably in much improved reliability of collecting payments via direct payment schemes compared to card payments.

I wonder whether Stripe's medium-term goal might be to establish its own merchant of record service, and Stripe Tax in its current form is just the opening move. Otherwise, it doesn't really make sense to me as a strategy. But I have no inside knowledge on this and there are several Stripe people around who probably do, so no doubt if they want to elaborate at this time they will.

For brick-and-mortar sales, that is the physical location of the store: you will be taxed the appropriate rate for the address of the store. Note that this includes includes online orders picked up from a store location, and in-person orders even if the goods are not actually physically located at the store, such as if they are shipped from a separate warehouse to the store. However, delivery orders might be subject to different rules, depending on the state; some states use the address provided by the customer as the location of the sale, so that in-person sales delivered to out-of-state addresses might not be subject to sales tax.

For online sales, the sale is (now) treated to have occurred at the address provided by the buyer for delivery, because that is the most expedient way to determine address. The EU has made waves about using IP addresses or geolocation to determine the actual location of the buyer at the time the order is submitted, but AFAIK both proposals are DOA due to infeasibility.

It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller is potentially making use of business development credits etc, etc, originating in their state.

No, the seller's state doesn't have a claim to the sales tax, because sales tax is a tax on the customer not the seller. It is simply collected by the seller because the compliance is easier to enforce. (Caveat: in Hawaii, the GET is a tax on the seller that can be passed on to the customer.)

2. Same as #1.

3. Rates for sales tax generally change every few years as it requires an unbelievably large amount of notification to sellers, service providers, etc. Where sales tax rates change faster than that, it is usually part of a pre-planned and pre-published change in rates occurring over several years. A sales tax rate changing annually is actually fairly uncommon; a sales tax rate changing more frequently than annually (absent special circumstances like COVID19 incentive rates) is extremely rare.

4. This is basically the purpose of the Streamlined Sales Tax, which is an initiative of over two dozen states to streamline sales tax compliance: only a single return is required and it covers all of the member states. However, it is voluntary.

Note that your suggestion for payment is unfeasible, since it would require each payment to also include the tax liability data for every other state, and each state would have to set up a separate bureaucracy to handle money transfer. It's faster and more efficient for taxpayers and states to simply have the taxpayer use existing payment mechanisms to pay each state separately. On the taxpayer side, it's literally seconds more work if you're using a unified tax system (like the SST).