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Someone needs to develop a service to make calculating and paying the sales tax easier. Something like plugin an address and it spits out the tax percentage and

Someone needs to develop a service to make calculating and paying the sales tax easier. Something like plugin an address and it spits out the tax percentage and where to remit the payment to. Ideally the states would get together and create a centralized service so companies don't have to be mailing checks to every single county government that has a sales tax.

deleted 8y ago
[deleted]
donatj 8y ago
A number of these exist. Where I used to work we used Avalara.
Agathos 8y ago
I'm pretty sure that product exists. I've heard of AvaTax; there may be others. I typed "avatax vs" in Google and it autocompleted "taxjar", so there's another I guess. Yes it would be nice if the states made it easier.
magduf 8y ago
The problem with this is: how do you know what the tax rate is for the product you're selling? For instance, if you're in New Jersey and you're selling a clothing item like a pair of socks, then there's no tax. But if you're selling a fur coat, then there's full sales tax. There's different tax rates for different products, and it varies wildly across almost 10,000 different jurisdictions in the US.
- nulagrithom 8y ago
  I wonder if this extends to county/city taxes? That would open up even more ridiculous complexity. Locally, there's a poorly structured (ie not machine-readable) spreadsheet of municipal taxes that tell you, based on _what side of the street_ you're on, whether you fall under the "mosquito district tax" that requires a small percentage more sales tax to pay for the annual spraying of mosquitoes. Without simplifying the tax codes, I'm not sure full compliance over the web is even possible...
- anonymous5133 8y ago
  I work as a sales tax auditor. The answer is, you as the merchant need to know those rules. For smaller retailers they usually just tax everything unless the buyer has given some sort of exemption certificate. For the merchant you can tax exempt items as long as you remit the tax but if you dont tax a taxable item then you become fully liable for the uncollected tax. Thats why these smaller retailers tax everything.
- TangoTrotFox 8y ago
  On top of this there are also conditional taxations and tiers. For instance you pay $x in tax if you've moved $y in product $z in jurisdiction q unless condition c applies. This seems pretty nasty for any business that doesn't have full time legal and accounting teams.
- jonknee 8y ago
  In general you would identify the product type from a list of a lot of product types and then let your sales tax calculator as a service provider sort out what needs taxed and at what rate.
  - NeonVice 8y ago
    What if each state has a different set of product types? IMO, the federal government's responsibility to regulate interstate commerce should include creating a standard of product categories. States can then tax those categories at whatever level they see fit.
    - jonknee 8y ago
      That shouldn't matter too much, identify with the most granular option there is one time for each product and then let the tax provider figure out what falls into each bucket for each state. Also, UPC codes should help automate it for large swaths of products. If I buy a Sony lens cap from B&H or Amazon or Random Joe's Camera Shop it would have the same UPC and can be automatically classified by any number of tax vendors.
- jakejohnson 8y ago
  When using a sales tax API, the merchant configures their product catalog by assigning products to specific tax categories or tax codes based on the sales tax provider. Some tax categories are extremely granular to accommodate the scenario you mentioned. The logic on whether or not the product is taxable in a specific state based on a certain threshold is done completely within the API when passing over tax codes for each line item.
rstupek 8y ago
We have used TaxCloud which handles computing and paying the sales tax. You have to set what type of product each item you sell is so they know how to calculate tax for that type of item where you're selling it
mbesto 8y ago
It does. https://www.taxjar.com/ https://www.taxjar.com/ https://www.avalara.com/ https://www.avalara.com/ Lots of ERP's have it built in.
gmiller123456 8y ago
And that "someone" should be whoever is requiring the tax to be collected. If such a process is too complicated or expensive for a state to offer, that should be the first clue that it's too complicated or expensive to require every single business across the country to implement.

deleted 8y ago

[deleted]

donatj 8y ago

A number of these exist. Where I used to work we used Avalara.

Agathos 8y ago

I'm pretty sure that product exists. I've heard of AvaTax; there may be others. I typed "avatax vs" in Google and it autocompleted "taxjar", so there's another I guess. Yes it would be nice if the states made it easier.

magduf 8y ago

The problem with this is: how do you know what the tax rate is for the product you're selling? For instance, if you're in New Jersey and you're selling a clothing item like a pair of socks, then there's no tax. But if you're selling a fur coat, then there's full sales tax. There's different tax rates for different products, and it varies wildly across almost 10,000 different jurisdictions in the US.

nulagrithom 8y ago
I wonder if this extends to county/city taxes? That would open up even more ridiculous complexity. Locally, there's a poorly structured (ie not machine-readable) spreadsheet of municipal taxes that tell you, based on _what side of the street_ you're on, whether you fall under the "mosquito district tax" that requires a small percentage more sales tax to pay for the annual spraying of mosquitoes. Without simplifying the tax codes, I'm not sure full compliance over the web is even possible...
anonymous5133 8y ago
I work as a sales tax auditor. The answer is, you as the merchant need to know those rules. For smaller retailers they usually just tax everything unless the buyer has given some sort of exemption certificate. For the merchant you can tax exempt items as long as you remit the tax but if you dont tax a taxable item then you become fully liable for the uncollected tax. Thats why these smaller retailers tax everything.
TangoTrotFox 8y ago
On top of this there are also conditional taxations and tiers. For instance you pay $x in tax if you've moved $y in product $z in jurisdiction q unless condition c applies. This seems pretty nasty for any business that doesn't have full time legal and accounting teams.
jonknee 8y ago
In general you would identify the product type from a list of a lot of product types and then let your sales tax calculator as a service provider sort out what needs taxed and at what rate.
- NeonVice 8y ago
  What if each state has a different set of product types? IMO, the federal government's responsibility to regulate interstate commerce should include creating a standard of product categories. States can then tax those categories at whatever level they see fit.
  - jonknee 8y ago
    That shouldn't matter too much, identify with the most granular option there is one time for each product and then let the tax provider figure out what falls into each bucket for each state. Also, UPC codes should help automate it for large swaths of products. If I buy a Sony lens cap from B&H or Amazon or Random Joe's Camera Shop it would have the same UPC and can be automatically classified by any number of tax vendors.
jakejohnson 8y ago
When using a sales tax API, the merchant configures their product catalog by assigning products to specific tax categories or tax codes based on the sales tax provider. Some tax categories are extremely granular to accommodate the scenario you mentioned. The logic on whether or not the product is taxable in a specific state based on a certain threshold is done completely within the API when passing over tax codes for each line item.

rstupek 8y ago

We have used TaxCloud which handles computing and paying the sales tax. You have to set what type of product each item you sell is so they know how to calculate tax for that type of item where you're selling it

mbesto 8y ago

It does. https://www.taxjar.com/ https://www.taxjar.com/ https://www.avalara.com/ https://www.avalara.com/ Lots of ERP's have it built in.

gmiller123456 8y ago

And that "someone" should be whoever is requiring the tax to be collected. If such a process is too complicated or expensive for a state to offer, that should be the first clue that it's too complicated or expensive to require every single business across the country to implement.