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Stripe Tax

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Re: Stripe Tax

#181

Post by koolba »

TheRealPomax wrote: post #172
theflyinghorse wrote: post #171

The feature is of course very nice, but the pricing is steep at 0.5% of your transactions. So I'm giving away 0.5% of my revenue (provided all of my revenue comes from sales) for the privilege of having my taxes calculated? That's on top of the 2.9%+30c per transaction that I already pay stripe?

Correct. But that's not what you're paying for of course, you're paying for the fact that you don't need to pay an accountant to double check these numbers: if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe--if you so choose--to take on the legal responsibility of getting it right.

Is that legally binding somewhere? If they completely miss out that we were meant to collect X% for a municipality, will they be covering that out of their pocket?

Re: Stripe Tax

#182

Post by giansegato »

TheRealPomax wrote: post #172
theflyinghorse wrote: post #171

The feature is of course very nice, but the pricing is steep at 0.5% of your transactions. So I'm giving away 0.5% of my revenue (provided all of my revenue comes from sales) for the privilege of having my taxes calculated? That's on top of the 2.9%+30c per transaction that I already pay stripe?

Correct. But that's not what you're paying for of course, you're paying for the fact that you don't need to pay an accountant to double check these numbers: if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe--if you so choose--to take on the legal responsibility of getting it right.

I don't really think you're paying for accountability. That would involve some serious risk taking on Stripe side. I see no mention of this in the marketing material.

Re: Stripe Tax

#183

Post by kybernetikos »

dangrossman wrote: post #131
kybernetikos wrote: post #108

Earlier quoted context omitted.

Credit card fees in general are like an extra tax. And credit card companies have so much power they have pushed the cost onto all transactions, even those that use cash (by forcing merchants to eat the cost difference, they push all prices with that merchant up).

This is something people say often, but studies put the cost of accepting cash for retailers at 4.7-15.3%, which is higher than the cost to accept credit cards. If anything, it's the high cost of handling cash built into prices that's increasingly burdening credit card users in stores, not the other way around.

I would take that as an argument that we should have better 'cash' that has lower costs to use.

Re: Stripe Tax

#184

Post by nickpp »

hobofan wrote: post #179
nickpp wrote: post #174

Earlier quoted context omitted.

I believe that. But on the other hand you had to implement sales tax - that seems to me a few orders of magnitude more complicated. Was it worth the tradeoff maybe?

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...

Re: Stripe Tax

#185

Post by comex »

kevin_thibedeau wrote: post #178
scubakid wrote: post #161

Earlier quoted context omitted.

Last time I looked into this, it seemed to me like in the US you would need a separate license for each state you collect sales tax in (before collecting any tax)... and naturally, each state has a different licensing process, and some charge fees to register. For small independent projects, it seemed like kind of a nightmare.

You don't have to collect tax for states you don't have a presence in. They have no jurisdiction outside their borders.

That used to be the law, but is no longer as of 2018:

https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.

Re: Stripe Tax

#186

Post by sdevonoes »

Ndymium wrote: post #51

I have a nano sized business to cover some server costs in Finland. Here are the EU rules as I understand them: * Selling goods - If selling to private persons in European Union fiscal territory (EUFT), add 24% (Finnish VAT). - If selling to businesses in EUFT, no VAT. - If selling to anyone outside EUFT, no VAT, but you may be liable to collect and pay VAT to the customer's country's tax authorities. - Note that the…

> - If selling to anyone outside EUFT, no VAT, but you may be liable to collect and pay VAT to the customer's country's tax authorities.

I thought selling to businesses outside EUFT was the same as selling to businesses inside the EUTF.

Re: Stripe Tax

#187

Post by Silhouette »

andylynch wrote: post #140
throwaway368392 wrote: post #132

Does that mean a small US-based B2B SaaS with no EU nexus have to pay EU VAT? It seems overreaching.

Only if you meet the volume thresholds, which vary by country - e.g. for sales to Ireland you must register and pay VAT if your sales are over EUR 35k / year, but in Germany its 100k.

Are you sure this still applies in the case of purely digital sales like SaaS, and for businesses selling into an EU country but based outside rather than domestic businesses selling within their own country?

Re: Stripe Tax

#188

Post by tzs »

teamspirit wrote: post #170
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…

How quickly my excitement disappeared when I saw that California was not a member. Thanks for the information; I'm sure there are others, like myself, that have no idea such a thing exists.

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, I would have to collect California tax even though I'm below the threshold because the deal to get free full service tax handling under SST is that I collect for all SST states.

I don't see any downside for California. At the stroke of a pen, they would suddenly be getting tax collected from a ton of remote sellers that fall below the $500 000/year threshold.

Same with Texas, which also has a $500 000/year threshold, or New York which is $500 000/year and 100 transactions, or Florida which is $100 000/year, or Illinois which is $100 000/year or 200 transactions.

Re: Stripe Tax

#189

Post by ysavir »

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…

I had no idea this was a thing! You should submit it to HN as its own item.

Re: Stripe Tax

#190

Post by corentin88 »

theflyinghorse wrote: post #171

The feature is of course very nice, but the pricing is steep at 0.5% of your transactions. So I'm giving away 0.5% of my revenue (provided all of my revenue comes from sales) for the privilege of having my taxes calculated? That's on top of the 2.9%+30c per transaction that I already pay stripe?

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.
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