This article doesn't say anything about it, but I wonder how these businesses were handling their taxes in the first place. Helping you avoid these scenarios is one of the things a good CPA firm does.
Denver's tax on web and app development draws ire from software execs
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Re: Denver's tax on web and app development draws ire from software execs
#22As much as I find these taxes ridiculous (and also hard to predict for a business owner), Couldn't they just add 3.62% to their billed costs to cover those expenses? On a $100k software gig, this would be just $3620 or so. Round it to $105k and they should be pulling in the same amount. On $10k it's just $362. So that would maybe shift a $10k project bid to $10.5k to cover those taxes and still bring in the same net…
I don't think the issue lies so much in tacking on a bit extra to cover the tax as much as being subject to it without knowing. It doesn't seem unreasonable to expect that building an application for another company would be considered a service. They may have done the research and discovered that service providers aren't required to collect sales tax and moved on. The tax code is such that you can't expect to understand every little component of it unless it is your full-time job.
Re: Denver's tax on web and app development draws ire from software execs
#23> "If we go out to Westminster to go to Costco to buy sodas for employees in the office in Denver, we're on the hook to pay the difference between the sales tax in Westminster and the sales tax in Denver," said Stefan Ramsbott, 303 Software's co-founder. Is this supposed to be a joke?! Seriously, what kind of bullsh.t is this? I accept having to pay VAT and customs when importing stuff from another country , but from…
Just thinking about Scotland independence vote. Could see that kind of thing within UK soon depending on which way it goes. That is still a national boundary though.
It wouldn't be within the UK, since a 'yes' vote implicitly causes the UK to cease to exist.
It would be more like Norwegians crossing the border to Sweden to stock up on cheap beer - which already happens. I believe you sometimes see similar things in Ireland at the Northern Ireland/EIRE border, depending on VAT and currency exchange rates.
Re: Denver's tax on web and app development draws ire from software execs
#24As much as I find these taxes ridiculous (and also hard to predict for a business owner), Couldn't they just add 3.62% to their billed costs to cover those expenses? On a $100k software gig, this would be just $3620 or so. Round it to $105k and they should be pulling in the same amount. On $10k it's just $362. So that would maybe shift a $10k project bid to $10.5k to cover those taxes and still bring in the same net…
Hi folks, this is Matt from 303 Software, the dev shop in the article. Rexreed, you're right. Thing is, I don't even mind paying the tax going forward. We'll just add the 3.62% to our invoices. What I object to is having to pay back taxes, penalties, and interest on this obscure tax while the City gives tax breaks to out of state companies.
Re: Denver's tax on web and app development draws ire from software execs
#25This article doesn't say anything about it, but I wonder how these businesses were handling their taxes in the first place. Helping you avoid these scenarios is one of the things a good CPA firm does.
This is Matt from 303 Software. We pay our taxes in full and on time. Our two accounting firms and one law firm had never heard of this tax until the auditor showed up at my door. And sadly we weren't the only ones in Denver who thought they were in compliance.
Re: Denver's tax on web and app development draws ire from software execs
#26Hi folks, this is Matt from 303 Software, the dev shop in the article. Happy to answer your questions here.
Re: Denver's tax on web and app development draws ire from software execs
#27Earlier quoted context omitted.
Just thinking about Scotland independence vote. Could see that kind of thing within UK soon depending on which way it goes. That is still a national boundary though.
It wouldn't be within the UK, since a 'yes' vote implicitly causes the UK to cease to exist. It would be more like Norwegians crossing the border to Sweden to stock up on cheap beer - which already happens. I believe you sometimes see similar things in Ireland at the Northern Ireland/EIRE border, depending on VAT and currency exchange rates.
No, I think there will be a United Kingdom, just one country less, but I take your wider point.