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Spark Capital will now pay their own legal bills

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Re: Spark Capital will now pay their own legal bills

#111

Post by mhp »

jacquesm wrote: post #85
mhp wrote: post #68

Earlier quoted context omitted.

Huh? I've paid a lot of legal fees and never remember seeing sales tax on them. I don't understand what you are saying.

I've paid a lot of legal fees as well and they always had sales tax on them. HN seems to be a bit myopic in this sense, that if something hasn't happened to an individual therefore it doesn't happen. But not everybody here looks at the data through the lens of a VC and that is what we're discussing here. In this thread VCs are equated with a cartel, the truth is they're all continuously in competition with each other…

While sales tax is usually a state issue and our disconnect may be the result of working in different states (I am in NY), you can see from the American Bar website that it's clear that sales tax is not usually levied on lawyer fees: http://www.americanbar.org/advocacy/governmental_legislative...

That link shows the American Bar saying 'Don't start charging sales tax on legal fees' which implies that they don't currently charge them.

"Currently, only three states have a tax on legal services – Hawaii, New Mexico and South Dakota"

So where do you work?

I think the myopia here is you assuming that VCs don't normally pay legal fees because it's a sales tax problem and they don't want to waste money.

Re: Spark Capital will now pay their own legal bills

#113

Post by skue »

jacquesm wrote: post #86
skue wrote: post #71

Earlier quoted context omitted.

While there are some US states that have considered taxing legal fees, this is certainly not the norm. Services are typically exempt from sales tax. From page 19 of California's guide to sales/use tax exemptions: > SERVICES—The sale of services where no tangible personal property is transferred or where the transfer of property is incidental, are not subject to sales and use taxes. Source: http://www.boe.ca.gov/pdf/p…

The world is a LOT larger than just California. I love it how HN lumps every VC and every lawyer into the same pile as though we all live in Silicon Valley.

And I love it how you lump every HN poster into the same pile as though we all live in Silicon Valley. It's probably too late for you to read this, but you're jumping to your own conclusions...

I've been on HN long enough to recognize your nick and I was well aware that you live in Europe. You jumped into a discussion about a US-based VC firm and claimed it was motivated by sales tax. Please don't get irate just because "HN" tried to be helpful by explaining why sales tax wouldn't apply here.

And for the record, I live 5,000+ kilometers from the VCs on Sand Hill Road.

Re: Spark Capital will now pay their own legal bills

#114

Post by benmccann »

jacquesm wrote: post #62
benmccann wrote: post #32

Earlier quoted context omitted.

I think it's also likely to reduce total legal expenditures. The investors previously did not see the legal bill and so their lawyers had less incentive to minimize fees.

You are essentially saying that a VC has no problem saddling up one of their portfolio companies with unnecessary costs, in other words that they are hurting their own interests.

Clearly the VCs have an interest in keeping legal expenditures down. But the extra layer of indirection does not help that goal. E.g. employers, individuals, and insurance companies all have an interest in lowering health costs, but the structure of the market makes it a difficult goal.
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