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Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

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Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#1

Post by wikiburner »

This seems like a pretty big deal for a lot of startups. The compliance requirements alone sound like a nightmare. I'm curious why none of the recent articles submitted to HN (from very legit sources like NYT and WSJ) are getting upvotes. Also, it's not like this is a hypothetical - it looks like it's going to be railroaded through very quickly.

EDIT: Here are some links:

http://www.nytimes.com/2013/04/23/technology/internet-sales-tax-gains-ground-in-senate.html

http://online.wsj.com/article_email/SB10001424127887324493704578432961601644942-lMyQjAxMTAzMDIwMTEyNDEyWj.html

http://thehill.com/blogs/hillicon-valley/technology/295431-internet-sales-tax-advances-after-obama-endorsement-

http://www.realclearpolitics.com/video/2013/04/22/carney_internet_sales_tax_is_simply_about_leveling_the_playing_field.html

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#3

Post by brd »

from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt."

Internet Sales Tax wouldn't be bad if it were uniformly imposed country wide (what amazon has pushed for). This specific bill, on the other hand, sounds like a nightmare.

The only saving grace being that at least states would be required to provide "software" - I can only hope that translates to APIs - to calculate taxes. That would make the problem significantly more manageable but it would still drastically increase the complexity of billing solutions for a lot of SMBs. The million dollar threshold is just too low for this to be anything but crushing for small businesses.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#4

Post by wikiburner »

brd wrote: post #3

from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt." Internet Sales Tax wouldn't be bad if it were uniformly imposed…

The next two paragraphs after the one you mentioned were possibly more relevant:

Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch.

Senator Ron Wyden, Democrat of Oregon, called the legislation “a targeted strike against the Internet and a targeted strike against the digital economy.”

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#5

Post by jacquesm »

For now I don't care because (1) I'm already paying sales tax and (2) This is a US centric thing, if anything it levels the playingfield / is an advantage depending on where you are.

The fact that there was a time when you did not have to pay sales tax should be seen as a gift, if there is one thing that seems to be a certainty over the long run it is that if there is a flow of money sooner or later it will be taxed.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#7

Post by virmundi »

wikiburner wrote: post #4
brd wrote: post #3

from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt." Internet Sales Tax wouldn't be bad if it were uniformly imposed…

The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation…

Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation.

As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#8

Post by seliopou »

jacquesm wrote: post #5

For now I don't care because (1) I'm already paying sales tax and (2) This is a US centric thing, if anything it levels the playingfield / is an advantage depending on where you are. The fact that there was a time when you did not have to pay sales tax should be seen as a gift, if there is one thing that seems to be a certainty over the long run it is that if there is a flow of money sooner or later it will be taxed.

Yes, it definitely does level the playing field between brick & mortar business and online businesses, and to a certain extent amongst states. What would have been really interesting is if the taxes revenues went to the state that the business was operating out of. Unfortunately, that'd probably just mean more tax revenue for either Delaware or the existing tech hubs of America. I think it's because of this fact that a more complex system is necessary. It's much more fair to the states.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#9

Post by ScottWhigham »

brd wrote: post #3

from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt." Internet Sales Tax wouldn't be bad if it were uniformly imposed…

Reminds me of the 1099 fiasco a few years back [1]. I think this has to be just as silly if not worse.

[1] - http://www.thetechgap.com/2010/12/who-to-blame-for-the-1099-...

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#10

Post by legitsource »

virmundi wrote: post #7
wikiburner wrote: post #4

Earlier quoted context omitted.

The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation…

Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation. As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.

In my area, there are state, county, and city sale taxes. You would need a full address and a database of addresses within city limits in order to determine the proper sales tax.
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