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Ask HN: Sales tax for a SaaS side-hustle
Hi HackerNews - I am going to start my first SaaS side-hustle. Any tips on when should I start worrying/collecting about sales tax. I haven't yet launched and not sure when will I make my first sale.
Any tips from your experience when you started?
Edit: Based in California, USA. All infrastructure located in California as well.
- pletsch 6y agoThis really depends on where you're located. Who are you using as a payment processor?
- aravya 6y agoI am based in California, US. I will either use Stripe for payments, if sales tax is not a concern at this point. Else, I would like to go via a reseller like Paddle to help with tax collection/deposit etc.
- pletsch 6y agoI'm not in California and I know a lot of people on HN are, so I'll refrain from giving further advice. If you don't find your answer, I'm sure an hour of an accountants time could help tremendously.
- aravya 6y agoSurely. I am trying to get much information before my upcoming meeting with a CPA so as to be ready with all my questions.
- ayoubElk 6y agoI think this largely depends on where you're based, you should provide more information to get advice specific to your situation.
- aravya 6y agoI am based in California, US.
- billconan 6y agoWe currently use stripe + taxjar, but it's too complex to handle for a side-hustle in my opinion. I have heard of https://paddle.com/ https://paddle.com/ , which is a payment service + tax handling. Basically it's like apple's app store. You sell your creation to paddle, and they resell it. So they will handle taxing and you get royalty. it's way easier. I have never tried them, but if I were to create a side-hustle, I will consider paddle.
- aravya 6y agoThanks for the advice, been looking at Paddle/FastSpring. If I may ask, did you start with tax collection on day one?
- billconan 6y agoya, the tax is calculated using taxjar's api on day one and it's reflected on the checkout page. (https://www.taxjar.com/sales-tax-calculator/ https://www.taxjar.com/sales-tax-calculator/). But I'm unsure about tax filing, because I don't know about our accounting. (We are a startup). If this is for my own side-hustle, I wouldn't want to deal with it. It's super complex. Each city has a different tax rate, and you need to file taxes to different states. Each state has a tax free allowance.