3 ms·

Doesn't the US have its own weirdness of this sort too? I seem to remember being charged a tax during checkout that was not part of the advertised price of an i

Doesn't the US have its own weirdness of this sort too? I seem to remember being charged a tax during checkout that was not part of the advertised price of an item in a retailer.

iso1210 6y ago
The US has sales tax, which can vary from town to town, let alone state to state. Unlike in Europe they don't include it in the advertised price - same as service. As a rule of thumb add 10% or 30% to the price you see on the shelf/menu and you may be in the right ballpark. I don't believe the tax isn't paid with interstate commerce though, giving a massive boost to online sales. There have been attempts to change this. There are two problems with collecting sales tax / vat in the modern world, the rules themselves (which can be byzantian, especially when involving 3 or more companies in the transaction), and compliance. Removing consumption taxes completely would be the easiest way to solve the problem, but there's still tariffs on international trade in most countries. If I buy a CD from another country, I have to pay import duty. If I buy an mp3 I don't. Or do I?
- tzs 6y ago
  > I don't believe the tax isn't paid with interstate commerce though, giving a massive boost to online sales. There have been attempts to change this. That changed in 2018 with the Supreme Court decision in South Dakota v. Wayfair [1]. Online sellers now have to collect sales tax on sales into any state where they meet that state's "economic nexus" law. Here's a summary of each state's economic nexus law [2]. It's way worse than VAT. With VAT, all you need to know is what country the buyer is in, and which of a handful of categories the thing you are selling falls under. It's easy to figure out the rates on a given sale yourself. Then it is just a matter of registering with one EU country, and using their VAT MOSS system to submit a simple quarterly report with your sales for each country. It just got less simple because the UK failed to arrange to stay in the VAT MOSS system, so now you need to deal with them separately, so it is two quarterly reports you have to file. With US state sales tax, you have to know the exact address of the buyer. The tax at 123 Foo Street might be different from the tax at 124 Foo Street. Heck...I remember that the last time I played around with state tax data, I found cases where 123 Foo Street Suite 100 and 123 Foo Street Suite 200 had different tax rates. There are also many more categories of goods that might have different rates than there are under EU and UK VAT. If you want to play around with the insanity that it is to figure out sales tax rates in the US, you can download data for about half the states from here, in a common format [3]. You can get data directly from states, but then you have to deal with each state having its own format. Each state of course has its own way of submitting your reports. That and the difficulty in determining rates pretty much guarantees that you need to use a third party tax service. [1] https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. [2] https://www.avalara.com/us/en/learn/guides/state-by-state-guide-economic-nexus-laws.html https://www.avalara.com/us/en/learn/guides/state-by-state-gu... [3] https://www.streamlinedsalestax.org/Shared-Pages/rate-and-boundary-files/rate-and-boundary-file-updates https://www.streamlinedsalestax.org/Shared-Pages/rate-and-bo...

Doesn't the US have its own weirdness of this sort too? I seem to remember being charged a tax during checkout that was not part of the advertised price of an item in a retailer.

iso1210 6y ago

The US has sales tax, which can vary from town to town, let alone state to state. Unlike in Europe they don't include it in the advertised price - same as service. As a rule of thumb add 10% or 30% to the price you see on the shelf/menu and you may be in the right ballpark. I don't believe the tax isn't paid with interstate commerce though, giving a massive boost to online sales. There have been attempts to change this. There are two problems with collecting sales tax / vat in the modern world, the rules themselves (which can be byzantian, especially when involving 3 or more companies in the transaction), and compliance. Removing consumption taxes completely would be the easiest way to solve the problem, but there's still tariffs on international trade in most countries. If I buy a CD from another country, I have to pay import duty. If I buy an mp3 I don't. Or do I?

tzs 6y ago
> I don't believe the tax isn't paid with interstate commerce though, giving a massive boost to online sales. There have been attempts to change this. That changed in 2018 with the Supreme Court decision in South Dakota v. Wayfair [1]. Online sellers now have to collect sales tax on sales into any state where they meet that state's "economic nexus" law. Here's a summary of each state's economic nexus law [2]. It's way worse than VAT. With VAT, all you need to know is what country the buyer is in, and which of a handful of categories the thing you are selling falls under. It's easy to figure out the rates on a given sale yourself. Then it is just a matter of registering with one EU country, and using their VAT MOSS system to submit a simple quarterly report with your sales for each country. It just got less simple because the UK failed to arrange to stay in the VAT MOSS system, so now you need to deal with them separately, so it is two quarterly reports you have to file. With US state sales tax, you have to know the exact address of the buyer. The tax at 123 Foo Street might be different from the tax at 124 Foo Street. Heck...I remember that the last time I played around with state tax data, I found cases where 123 Foo Street Suite 100 and 123 Foo Street Suite 200 had different tax rates. There are also many more categories of goods that might have different rates than there are under EU and UK VAT. If you want to play around with the insanity that it is to figure out sales tax rates in the US, you can download data for about half the states from here, in a common format [3]. You can get data directly from states, but then you have to deal with each state having its own format. Each state of course has its own way of submitting your reports. That and the difficulty in determining rates pretty much guarantees that you need to use a third party tax service. [1] https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. [2] https://www.avalara.com/us/en/learn/guides/state-by-state-guide-economic-nexus-laws.html https://www.avalara.com/us/en/learn/guides/state-by-state-gu... [3] https://www.streamlinedsalestax.org/Shared-Pages/rate-and-boundary-files/rate-and-boundary-file-updates https://www.streamlinedsalestax.org/Shared-Pages/rate-and-bo...