Stripe Tax • Hacker News Board

Re: Stripe Tax

#351

Post by glennpratt » Fri, Jun 11, 2021, 3:20 AM UTC

tzs wrote: post #253

gamblor956 wrote: post #235

Earlier quoted context omitted.

California is not a member of the SST because it does not currently tax a number of things that are subject to tax under the SST regime. For example, digital goods are taxable in SST states but not in California. Similarly, there are a number of other product categories where CA's taxability classifications do not match the SST's classifications. Generally, the total tax they could collect from remote (non-CA) seller…

The US could really use some national action on sales taxes. I'd like to see Congress make it so a state can only require remote sellers with no physical presence in the state to collect tax for the state if: 1. Tax rates on remote sales are uniform within a zip code. No more having to deal with "123 Fake Street, Hooterville, 65026" having a different tax rate than "124 Fake Street, Hooterville, 65026". (Worse, I rec…

As someone opposed to sales taxes, I'd rather the federal government stay out of it.

Re: Stripe Tax

#352

Post by TempAccount234 » Fri, Jun 11, 2021, 3:34 AM UTC

throwokay wrote: post #100

yannoninator wrote: post #19

Earlier quoted context omitted.

YES, considering the only best competitor in this space Paddle takes 5%. Taxes is the reason why in the past most EU/UK businesses go to Paddle. Stripe's Tax feature now saves people who were considering Paddle a lot of time now.

I thought Avalara was the leader in this space. What is their pricing, I can't find it on the site.

Personal experience from using Avalara for six months: - Returns were processed via a queued batch job. It could take between 1-3 hours after submitting to process a return. Avalara had a countdown clock on their website showing the estimated hours/minutes remaining until the return would get processed. I have seen the countdown clock show 1-3 hours plenty of times (quite frustrating). This was the case 6-12 months ago. Perhaps Avalara has fixed this issue since.

- The 1-3 hour wait made filing quite difficult when the original return had an error. Submitting a second return to cancel the first required another 1-3 hour wait. Then submitting the final (third) return required another 1-3 hour wait. Filing one state easily turned into a whole day ordeal if there was an error.

- Support from level one/two staff for difficult tax questions did not help. Level one/two staff gave a vocal repeat from the online help guide. Level three support was acceptable however.

- Tax returns filed with Avalara are done via a rather cumbersome spreadsheet. Don't expect someone to hold your hand. Rather, it requires many trial and error submissions to figure out how to make the Avalara engine work.

Note: A basic "shipping product" business like Amazon/Walmart would do fairly well with Avalara. However, a company that does complex construction projects will have challenges. We ended up reverting to filing taxes manually.

Re: Stripe Tax

#353

Post by voiper1 » Fri, Jun 11, 2021, 5:36 AM UTC

nickpp wrote: post #148

Honest question: can somebody enlighten me about Stripe's appeal? I am not an user (until recently they weren't even available in my country) but I used ShareIt (now Digital River) 20 years ago and Avangate (now 2checkout soon Verifone) in the past 15 years and they both: - had a much larger international presence, with localizations and everything - had sales taxes, VATs etc computed from day one - had cart (not sur…

Besides for the extreme ease of documentation (which is getting a little harder now that there's so many different services), Stripe gained a lot of traction at the start.

Stripe was one of the first credit card acceptance companies with $0 monthly fees. I was paying a merchant account monthly, then authorize.net gateway fee, then an extra $20 to authorize.net to store tokens. Then the per-card fees were somewhat opaque with every card (qualified vs non-qualified) having different pricing.

With stripe, it became much lower risk: pay a set fee for each transaction. No monthly minimums.

Many of the credit card companies have moved to this model, but it was rather cutting edge and seemed much more "fair" for a commoditized gateway.

Re: Stripe Tax

#354

Post by chinathrow » Fri, Jun 11, 2021, 6:15 AM UTC

eps wrote: post #61

chinathrow wrote: post #6

Earlier quoted context omitted.

Yes, the 0.5% adds up. 0.5% for Billing, 2.9% + 30c per transaction, more if you add e.g. fraud for teams etc. Stripe is great and I use it too, but the way they charge you (a percentage of your revenue) is simply not that fair in the long run while their workload has a fixed cost per transaction.

Don't forget they also force-convert payout wires to your native currency if you aren't in the US. Even if you operate mostly in USD, have USD accounts, etc.

Yes, I omitted the 2% currency conversion fee if you payout in to another currency.

I solved this partially by using Wise (formerly Transferwise) for USD->XYZ conversion and paying way less now.

Re: Stripe Tax

#355

Post by camkego » Fri, Jun 11, 2021, 7:11 AM UTC

Silhouette wrote: post #321

nikon wrote: post #295

Earlier quoted context omitted.

Paddle is fundamentally different to Stripe. As you said they a merchant of record. Your customers purchase via Paddle, manage the subscription etc via them. Disputes would be via them too. Something to bear in mind.

Sure, the model is different, but that still doesn't make signing up to an impossible promise with unbounded liability when you inevitably break it a good idea. What happens if Paddle are faced with a customer who is getting snotty about a bug and threatening litigation in an expensive jurisdiction? Paddle apparently have the right under their terms to settle that dispute on whatever terms they wish and then pass the…

Interesting insights into the TOS of Paddle. Have you compared the TOS of Paddle to FastSpring?

Re: Stripe Tax

#356

Post by sudhirj » Fri, Jun 11, 2021, 7:14 AM UTC

lemming wrote: post #343

sudhirj wrote: post #192

Earlier quoted context omitted.

The tipping point is the 2% for currency conversion, but keep in mind that this is happening either way on Paddle as well, just not going to Paddle. Paddle takes 5%, then the entity that converts from USD to your currency (Payoneer / wire transfer bank) takes the 2% or more. Stripe calls it out clearly and gives you your money in your own currency.

Paddle uses Currency Cloud for that, which charges a true mid-market rate and a very low transaction fee. It's what Transferwise uses behind the scenes.

They use whatever to convert all the currencies of the world into your base currency, usually USD/EUR. Then they transfer that to you, and you pay more conversion fees if that’s not your actual base.

Re: Stripe Tax

#357

Post by vvoyer » Fri, Jun 11, 2021, 7:29 AM UTC

edwinwee wrote: post #331

devops000 wrote: post #315

Earlier quoted context omitted.

I think you still need to collect VAT ID on your website and associate it to a stripe customer

Nope, no need! Tax ID is validated when you accept the payment: https://stripe.com/docs/tax/checkout#create-session .

Precision: if you're using Stripe checkout only. On a custom integration you do need to get the customer VAT ID and add it to your Stripe customer

Re: Stripe Tax

#358

Post by jerrre » Fri, Jun 11, 2021, 7:58 AM UTC

kmoriarty wrote: post #220

jerrre wrote: post #75

Earlier quoted context omitted.

There are also a lot of thresholds that might apply to your situation. More rules to look up, but could simplify it to having less administration if your revenue is under a couple K's

Good point! And with Stripe Tax we'll monitor how close you are to those thresholds too, so you'll know when and where you need to register as your business grows or sells into new markets.

Do you also provide advise on how to register?

Re: Stripe Tax

#359

Post by Silhouette » Fri, Jun 11, 2021, 8:01 AM UTC

camkego wrote: post #355

Silhouette wrote: post #321

Earlier quoted context omitted.

Sure, the model is different, but that still doesn't make signing up to an impossible promise with unbounded liability when you inevitably break it a good idea. What happens if Paddle are faced with a customer who is getting snotty about a bug and threatening litigation in an expensive jurisdiction? Paddle apparently have the right under their terms to settle that dispute on whatever terms they wish and then pass the…

Interesting insights into the TOS of Paddle. Have you compared the TOS of Paddle to FastSpring?

Yes we have, though the terms for vendors that are linked from the main terms page on the FastSpring website don't seem to be the correct ones for vendors in the UK so our current assessment is only provisional.

The FastSpring terms don't appear to create the same risks for us that we identified in connection with Paddle's terms as I mentioned above.

Re: Stripe Tax

#360

Post by Cu3PO42 » Fri, Jun 11, 2021, 8:20 AM UTC

nybble41 wrote: post #260

Cu3PO42 wrote: post #85

Earlier quoted context omitted.

VAT is uniform across all of Germany. Therefore detailed location information isn't necessary. The country can be inferred reasonably accurately from the IP. You can have a drop-down somewhere to correct the country if necessary. ~~And I don't think there's a law that requires you to show the price including tax, but it's definitely expected.~~ I have been corrected: it is indeed required.

> The country can be inferred reasonably accurately from the IP. That would be a guess at best. A VPN or caching service (or merely inaccurate geo-IP data) could cause the site to infer the wrong location. The law linked by Vespasian doesn't appear to make any allowance for cases where the tax jurisdiction may be uncertain, though it's possible that the automated translation I read glossed over some nuance. > You can…

As Vespasian said this law was written before consumers had large scale access to the internet and used it to order things online and from foreign countries.

In practice, if you're not a German business you probably don't need to worry about it too much. Most (if not all) countries in the EU have at least the custom of showing final prices including tax. If you're an EU business, you could just do that by default unless the customer explicitly specifies they are from elsewhere.

If you're a non-EU business selling to EU customers, you don't need to handle VAT. The customer is responsible for paying VAT upon import and will generally be notified by customs of the amount due before the item is released. Of course you can choose to handle VAT and make the customer's life easier, but you don't need to.

When I order something from Amazon.co.uk to Germany (post brexit) I see the normal price including British VAT on the product page. As soon as I add the item to the cart and go to checkout, VAT goes to 0% (doesn't apply because the item isn't sold in Britain) and I get an "Import Fee Deposit" added. The latter consists of German VAT and any applicable duties. This is because they handle dealing with customs on my behalf.