4 ms·

That sounds harder and more expensive for the business than simply having a standard system to collect and pay the sales tax.

reaperducer 8y ago
Paying sales taxes online for the one state where I have a business that does retail sales takes between 10 and 30 minutes, depending on how complex that quarter's sales were. Multiply by 50 states, and it's up to 25 hours a month of work. For those of you who have never done this, sales taxes are a lot more complicated than they seem. In the three states where I've had retail businesses, different types of products have different sales taxes and each has to be reported individually. It gets exponentially more complicated if your state also has use, consumption, or other retail taxes; and if it requires you to report purchases your company made out of state. If I had a popular company, even with small sales, I could easily see this becoming a week-long headache I offload onto my accountant, who will then charge me extra. So not only do I have to raise prices to include the sales tax for various states, I have to factor in the extra accounting expense.
- mikeyouse 8y ago
  But if the cutoff really is $200k per state, and you really had 50 states to take care of -- You'd be looking at a minimum of $10M in annual sales. If you're a $10M company, I think one of your accountants could spare the 6 hours per week taking care of it. I've worked with a lot of small businesses so I don't mean to disparage things but this seems like a really obvious law that should be enforced.
  - reaperducer 8y ago
    But if the cutoff really is $200k per state That's a pretty big if. The $200k cutoff from the article is South Dakota. I've never had a business in a state that had any cutoff at all. Only sell $1 this quarter? Pay the tax.
- jonknee 8y ago
  Or you could just outsource it to companies like TaxJar that specialize in this and pay a few bucks to have to all done automatically. After this ruling I expect more and more platforms will have this sort of thing built in. One or two more fields to fill out for your products, but otherwise completely automated.
  - reaperducer 8y ago
    a few bucks Please be more specific. Also, remember that every single one of those bucks will be passed on to the customer in higher prices.
    - jonknee 8y ago
      https://www.taxjar.com/pricing/ https://www.taxjar.com/pricing/ Considering you are already required to do it for where you are located it's just a little more work to automate it for all locations.
      - seandougall 8y ago
        That page doesn't appear to factor in filing costs, which run up to $5000/year. Also, I wouldn't generally classify it as "a little more work", since in many cases the old system could be hard-coded and the new system requires reworking the checkout flow to capture the full mailing address and pass it through an external API before calculating the transaction total.
  - objectivetruth 8y ago
    I think people's point is that if a small business HAS to hire an outside service like TaxJar to comply with the law (pragmatically, if not legally), then it's a bad law. Imagine if filing your personal tax return was, by law, so complicated that it was impossible for an individual to do it without hiring H&R Block -- that would be bogus. And to many of us, it seems awfully similar to what's happening here.

reaperducer 8y ago

Paying sales taxes online for the one state where I have a business that does retail sales takes between 10 and 30 minutes, depending on how complex that quarter's sales were. Multiply by 50 states, and it's up to 25 hours a month of work. For those of you who have never done this, sales taxes are a lot more complicated than they seem. In the three states where I've had retail businesses, different types of products have different sales taxes and each has to be reported individually. It gets exponentially more complicated if your state also has use, consumption, or other retail taxes; and if it requires you to report purchases your company made out of state. If I had a popular company, even with small sales, I could easily see this becoming a week-long headache I offload onto my accountant, who will then charge me extra. So not only do I have to raise prices to include the sales tax for various states, I have to factor in the extra accounting expense.

mikeyouse 8y ago
But if the cutoff really is $200k per state, and you really had 50 states to take care of -- You'd be looking at a minimum of $10M in annual sales. If you're a $10M company, I think one of your accountants could spare the 6 hours per week taking care of it. I've worked with a lot of small businesses so I don't mean to disparage things but this seems like a really obvious law that should be enforced.
- reaperducer 8y ago
  But if the cutoff really is $200k per state That's a pretty big if. The $200k cutoff from the article is South Dakota. I've never had a business in a state that had any cutoff at all. Only sell $1 this quarter? Pay the tax.
jonknee 8y ago
Or you could just outsource it to companies like TaxJar that specialize in this and pay a few bucks to have to all done automatically. After this ruling I expect more and more platforms will have this sort of thing built in. One or two more fields to fill out for your products, but otherwise completely automated.
- reaperducer 8y ago
  a few bucks Please be more specific. Also, remember that every single one of those bucks will be passed on to the customer in higher prices.
  - jonknee 8y ago
    https://www.taxjar.com/pricing/ https://www.taxjar.com/pricing/ Considering you are already required to do it for where you are located it's just a little more work to automate it for all locations.
    - seandougall 8y ago
      That page doesn't appear to factor in filing costs, which run up to $5000/year. Also, I wouldn't generally classify it as "a little more work", since in many cases the old system could be hard-coded and the new system requires reworking the checkout flow to capture the full mailing address and pass it through an external API before calculating the transaction total.
- objectivetruth 8y ago
  I think people's point is that if a small business HAS to hire an outside service like TaxJar to comply with the law (pragmatically, if not legally), then it's a bad law. Imagine if filing your personal tax return was, by law, so complicated that it was impossible for an individual to do it without hiring H&R Block -- that would be bogus. And to many of us, it seems awfully similar to what's happening here.