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Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the t

Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change. Most mom-and-pop online stores have disappeared too. Gone are the days when you went to Pricewatch.com and Pricescan.com. Now all the individual shops just create a store on Newegg, Amazon and eBay. I'm pretty sure the big players will start offering up tools to do these calculations for them as well.

ghaff 8y ago
Hopefully you're right and that there will be/are services that make it fairly easy/cheap for anyone of any size to be compliant without a lot of extra work. While there are a lot of edge cases, the reality is that companies using a payment processor will probably be fine even though there's a mistake here and there--which no one will actually know about. And the reality is that small businesses will mostly just fly under the radar if they want to even if some states don't have a floor for the sales that trigger taxes.
jakejohnson 8y ago
Yes, there are affordable sales tax APIs available for calculating sales tax. Usually massive lookup tables are at the zip / postal code level and don't provide enough granular detail by jurisdiction to accurately collect sales tax. They also don't contain logic around product exemptions, customer exemptions, shipping taxability, sales tax holidays, etc. I recommend using an API if you want to avoid under-collecting or over-collecting sales tax. However, this is a HUGE change. Instead of registering for a sales tax permit and remitting tax for one state, smaller merchants will have to do this in many states if they meet a certain threshold. They will likely have to use sales tax compliance software to aggregate all of their transaction data across multiple platforms (Amazon, eBay, Walmart, etc) and their shopping cart, then report / remit accordingly.
deathanatos 8y ago
Tennessee also has a "Sales Tax Holiday" on which certain items are tax exempt during certain times (during the holiday). And because we know how much programmers love date and time manipulations, it starts on "the last Friday in July" (I mean, it kinda had to, to be a weekend). [1]: https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax-holiday.html https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax...
- cpburns2009 8y ago
  An exemption such as this is one of those things that I'd say is not worth supporting unless you're based out of TN, or do enough of sales there to make it worth your while. Sure, I'd implement it if it's required but every special case is just another point of failure.
  - secabeen 8y ago
    But if you don't support it, are you liable for collecting more tax than required? How do you "not support" it? Just reject purchases from people in TN during the holiday?
    - cpburns2009 8y ago
      Disclaimer: I am not an accountant. I would figure tax holidays are optional and might even require an application to take advantage of. So you would charge the regular sales tax and remit it to the state. UPDATE: Out of curiosity I looked it up. And it looks like sales tax holidays depend as usual on the state. The MO back to school one is optional if less than 2% of merchandise is affected. But the TN one doesn't look optional.
      - windows_tips 8y ago
        Collecting 'tax' on an untaxed item could be considered acting falsely under color of law.
        8y ago
gist 8y ago
> There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change. Ok great so you know the tax to collect. How do you remit to a vast amount of jurisdictions? You think that's trivial? It's not.
nacho2sweet 8y ago
Programming one of these for a Canadian website for provincial tax to hook into another recurring payment script, that hooked into PayPal was an annoying overhead especially when the company was bootstrapped and had like $0 revenue to even care about at that point. I would hope Stripe or people using online services like Shopify will quickly add support for everyone. But the state by state, county by county, grocery vs non grocery stuff sounds like a goddamn nightmare. EDIT: You won't be able to just be some just launch it break stuff and fix later SASS. You will have to keep track of all this shit and send out 50 different cheques, or track when your company has reached the minimum to have to pay sales tax back.
- s73v3r_ 8y ago
  Brick and mortar don't get to do that either, so why should online ones?
  - ncallaway 8y ago
    When I launch a single brick and mortar store, I have to worry about the tax jurisdiction that store is in. When I launch a single small web app, I have to worry about everything single tax jurisdiction in the country. I'm super not opposed to taxes, but I do think this is an area that the federal government should step in. If only to provide a standardized system for different jurisdictions to report their sales tax laws. It seems like a very very clear use of the commerce clause and regulation of interstate commerce.
    - s73v3r_ 8y ago
      Congress has had decades to step in. They declined to, largely due to an anti-tax sentiment among a large block of them. Absent a resolution from Congress, and no indication that they'd do anything, the courts had to work with what they were given.
      - DoctorOetker 8y ago
        We should differentiate between 1) standardizing the tax calculation algorithm, and 2) standardizing the taxation rates As long as the two are conflated nothing will change. Irrespective of political/personal/ideological position on nr.2) I think most of us can agree on nr.1)... (except for the bigger chains, and the FUD navigation services.
sbov 8y ago
> Keep in mind in California, sales tax changes per county. More than that. Sales tax in California can change arbitrarily, not just by county. E.g. different cities in the same county can have different sales tax. To further complicate things, shipping address may have a city on it but they might not actually "live" in that city. E.g. in SoCal there is a city of "Westlake Village", which spans the Ventura-LA county border, which technically is a city in LA County, but technically is just a neighborhood within the city of Thousand Oaks in Ventura County. When I last looked at this a few years ago for a project, for certain problem addresses, no one got them right. Not Macy's, not Amazon, etc. The only real way to properly calculate sales tax is to geolocate their location.
- jedberg 8y ago
  As a fellow former resident of the county-spanning Westlake area, I can tell you that even the people that live there don't know where they live. I was debating with a friend of mine just the other day, and her and her mom couldn't even agree what city they lived in. Then I looked it up on the map, and different maps gave different answers. And they keep building new houses, so who the hell knows which tax jurisdiction each individual house is in? The people that live in them can't even keep track!
- rconti 8y ago
  Definitely not unique to CA, either. But I agree most online retailers don't write their own payment processing code anyway.
- gamblor956 8y ago
  The ruling is technically limited to states which do not impose burdensome restrictions on interstate commerce. The ruling specifically notes that South Dakota streamlined its sales tax process. It doesn't matter what Westlake Village wants to charge in sales tax to Amazon. In order for the sales tax to survive South Dakota v. Wayfair, it must be minimally restrictive on an out-of-state vendor. This means that it can't include local sales taxes, because an out-of-state vendor can't be expected to know about such taxes unless they do sufficient business with that locality. Note that both of the current federal sales tax laws before Congress also disallow local sales taxes in favor of state-level sales taxes. Long story short: there will be up to 50 sales taxes that online stores must deal with.
Glyptodon 8y ago
One of the things I've been wondering is if "state sales tax" in this ruling includes cities, counties, other subdivisions, or just full state level taxes only.
mark-r 8y ago
It's not just rates, it's product categories that matter. The rules separating one product category from another can get incredibly arcane. Here in Minnesota, a pizza ordered from Papa John's is taxed but from Papa Murphy's it isn't - because the Papa Murphy's isn't cooked. Clothing isn't taxed, but determining what is or isn't considered clothing isn't always easy out at the margins. If you live in a state you can get guidance on this stuff, but if you don't you might not even know to look.
cosmie 8y ago
> In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. That's not even the half of it. Grocery vs. non-grocery changes the rate. Some services that are tax exempt in other states are not in Tennessee. And in Tennessee, you have the state level of 7%, and the ability for it to rise up to 9.75% based on a whole lot of inter-dependent local tax overlays. The 2.75% difference comes from county, state, school district, transportation district, and "special purpose district" levies. All of which are optional to levy and voted on at the local level, and which may or may not overlap with each other to "stack" up to that cap at 9.75%. Avalara, which is the de-facto owner of the sales tax calculation software space, has a good write up[1]. [1] https://www.avalara.com/taxrates/en/state-rates/tennessee.html https://www.avalara.com/taxrates/en/state-rates/tennessee.ht...

ghaff 8y ago

Hopefully you're right and that there will be/are services that make it fairly easy/cheap for anyone of any size to be compliant without a lot of extra work. While there are a lot of edge cases, the reality is that companies using a payment processor will probably be fine even though there's a mistake here and there--which no one will actually know about. And the reality is that small businesses will mostly just fly under the radar if they want to even if some states don't have a floor for the sales that trigger taxes.

jakejohnson 8y ago

Yes, there are affordable sales tax APIs available for calculating sales tax. Usually massive lookup tables are at the zip / postal code level and don't provide enough granular detail by jurisdiction to accurately collect sales tax. They also don't contain logic around product exemptions, customer exemptions, shipping taxability, sales tax holidays, etc. I recommend using an API if you want to avoid under-collecting or over-collecting sales tax. However, this is a HUGE change. Instead of registering for a sales tax permit and remitting tax for one state, smaller merchants will have to do this in many states if they meet a certain threshold. They will likely have to use sales tax compliance software to aggregate all of their transaction data across multiple platforms (Amazon, eBay, Walmart, etc) and their shopping cart, then report / remit accordingly.

deathanatos 8y ago

Tennessee also has a "Sales Tax Holiday" on which certain items are tax exempt during certain times (during the holiday). And because we know how much programmers love date and time manipulations, it starts on "the last Friday in July" (I mean, it kinda had to, to be a weekend). [1]: https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax-holiday.html https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax...

cpburns2009 8y ago
An exemption such as this is one of those things that I'd say is not worth supporting unless you're based out of TN, or do enough of sales there to make it worth your while. Sure, I'd implement it if it's required but every special case is just another point of failure.
- secabeen 8y ago
  But if you don't support it, are you liable for collecting more tax than required? How do you "not support" it? Just reject purchases from people in TN during the holiday?
  - cpburns2009 8y ago
    Disclaimer: I am not an accountant. I would figure tax holidays are optional and might even require an application to take advantage of. So you would charge the regular sales tax and remit it to the state. UPDATE: Out of curiosity I looked it up. And it looks like sales tax holidays depend as usual on the state. The MO back to school one is optional if less than 2% of merchandise is affected. But the TN one doesn't look optional.
    - windows_tips 8y ago
      Collecting 'tax' on an untaxed item could be considered acting falsely under color of law.
      - 8y ago

gist 8y ago

> There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change. Ok great so you know the tax to collect. How do you remit to a vast amount of jurisdictions? You think that's trivial? It's not.

nacho2sweet 8y ago

Programming one of these for a Canadian website for provincial tax to hook into another recurring payment script, that hooked into PayPal was an annoying overhead especially when the company was bootstrapped and had like $0 revenue to even care about at that point. I would hope Stripe or people using online services like Shopify will quickly add support for everyone. But the state by state, county by county, grocery vs non grocery stuff sounds like a goddamn nightmare. EDIT: You won't be able to just be some just launch it break stuff and fix later SASS. You will have to keep track of all this shit and send out 50 different cheques, or track when your company has reached the minimum to have to pay sales tax back.

s73v3r_ 8y ago
Brick and mortar don't get to do that either, so why should online ones?
- ncallaway 8y ago
  When I launch a single brick and mortar store, I have to worry about the tax jurisdiction that store is in. When I launch a single small web app, I have to worry about everything single tax jurisdiction in the country. I'm super not opposed to taxes, but I do think this is an area that the federal government should step in. If only to provide a standardized system for different jurisdictions to report their sales tax laws. It seems like a very very clear use of the commerce clause and regulation of interstate commerce.
  - s73v3r_ 8y ago
    Congress has had decades to step in. They declined to, largely due to an anti-tax sentiment among a large block of them. Absent a resolution from Congress, and no indication that they'd do anything, the courts had to work with what they were given.
    - DoctorOetker 8y ago
      We should differentiate between 1) standardizing the tax calculation algorithm, and 2) standardizing the taxation rates As long as the two are conflated nothing will change. Irrespective of political/personal/ideological position on nr.2) I think most of us can agree on nr.1)... (except for the bigger chains, and the FUD navigation services.

sbov 8y ago

> Keep in mind in California, sales tax changes per county. More than that. Sales tax in California can change arbitrarily, not just by county. E.g. different cities in the same county can have different sales tax. To further complicate things, shipping address may have a city on it but they might not actually "live" in that city. E.g. in SoCal there is a city of "Westlake Village", which spans the Ventura-LA county border, which technically is a city in LA County, but technically is just a neighborhood within the city of Thousand Oaks in Ventura County. When I last looked at this a few years ago for a project, for certain problem addresses, no one got them right. Not Macy's, not Amazon, etc. The only real way to properly calculate sales tax is to geolocate their location.

jedberg 8y ago
As a fellow former resident of the county-spanning Westlake area, I can tell you that even the people that live there don't know where they live. I was debating with a friend of mine just the other day, and her and her mom couldn't even agree what city they lived in. Then I looked it up on the map, and different maps gave different answers. And they keep building new houses, so who the hell knows which tax jurisdiction each individual house is in? The people that live in them can't even keep track!
rconti 8y ago
Definitely not unique to CA, either. But I agree most online retailers don't write their own payment processing code anyway.
gamblor956 8y ago
The ruling is technically limited to states which do not impose burdensome restrictions on interstate commerce. The ruling specifically notes that South Dakota streamlined its sales tax process. It doesn't matter what Westlake Village wants to charge in sales tax to Amazon. In order for the sales tax to survive South Dakota v. Wayfair, it must be minimally restrictive on an out-of-state vendor. This means that it can't include local sales taxes, because an out-of-state vendor can't be expected to know about such taxes unless they do sufficient business with that locality. Note that both of the current federal sales tax laws before Congress also disallow local sales taxes in favor of state-level sales taxes. Long story short: there will be up to 50 sales taxes that online stores must deal with.

Glyptodon 8y ago

One of the things I've been wondering is if "state sales tax" in this ruling includes cities, counties, other subdivisions, or just full state level taxes only.

mark-r 8y ago

It's not just rates, it's product categories that matter. The rules separating one product category from another can get incredibly arcane. Here in Minnesota, a pizza ordered from Papa John's is taxed but from Papa Murphy's it isn't - because the Papa Murphy's isn't cooked. Clothing isn't taxed, but determining what is or isn't considered clothing isn't always easy out at the margins. If you live in a state you can get guidance on this stuff, but if you don't you might not even know to look.

cosmie 8y ago

> In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. That's not even the half of it. Grocery vs. non-grocery changes the rate. Some services that are tax exempt in other states are not in Tennessee. And in Tennessee, you have the state level of 7%, and the ability for it to rise up to 9.75% based on a whole lot of inter-dependent local tax overlays. The 2.75% difference comes from county, state, school district, transportation district, and "special purpose district" levies. All of which are optional to levy and voted on at the local level, and which may or may not overlap with each other to "stack" up to that cap at 9.75%. Avalara, which is the de-facto owner of the sales tax calculation software space, has a good write up[1]. [1] https://www.avalara.com/taxrates/en/state-rates/tennessee.html https://www.avalara.com/taxrates/en/state-rates/tennessee.ht...