6 ms·

Not sure how it works in the US but in the EU you don't have to register anything. Just keep tabs of what VAT you collected for what country, and then pay accor

by dstick 5y ago

Not sure how it works in the US but in the EU you don't have to register anything. Just keep tabs of what VAT you collected for what country, and then pay accordingly afterwards. No licenses needed.

chrismorgan 5y ago
How do they keep track of who you are? I presume you need a VAT ID of some form? (From https://en.wikipedia.org/wiki/VAT_identification_number#VAT_numbers_of_non-EU_countries https://en.wikipedia.org/wiki/VAT_identification_number#VAT_..., it looks like they’ve crafted it so that many countries’ business numbers can be turned into VAT IDs painlessly, e.g. Canada’s work direct, Australia’s you prefix with a two-digit checksum. I note the conspicuous absence of the USA from the list. I have no idea about US tax.)
scubakid 5y ago
Last time I looked into this, it seemed to me like in the US you would need a separate license for each state you collect sales tax in (before collecting any tax)... and naturally, each state has a different licensing process, and some charge fees to register. For small independent projects, it seemed like kind of a nightmare.
- kevin_thibedeau 5y ago
  You don't have to collect tax for states you don't have a presence in. They have no jurisdiction outside their borders.
  - scubakid 5y ago
    I think due to South Dakota v. Wayfair, states now have more power to define what constitutes "nexus"... so there are all these special rules and thresholds now to keep track of (different for every state) that define whether you have economic nexus and need to collect sales tax there. If you hit the threshold and/or other rules apply, you're obligated to collect sales tax... but of course you can't do this until you have secured a license in that state. This was my read on the situation, but if I'm missing something definitely let me know.
  - comex 5y ago
    That used to be the law, but is no longer as of 2018: https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.
    - R0b0t1 5y ago
      A bad ruling. To let it stand, the more reasonable interpretation is that the purchaser has to remit sales tax to their own state. But it may not stand on further challenge. For example, why should the state the items are leaving not be entitled to sales tax?
      - gamblor956 5y ago
        The law already was that the purchaser should remit use tax to the state for purchasers from out-of-state vendors. But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales, much less what rate would apply. Sales tax is basically use tax, but with the burden of compliance placed on the seller. As for why the sellers' state is not entitled to sales tax: in the old-time days, pre-Amazon, this was how many (but not all) tax jurisdictions determined sales tax. (For example, CO's sales tax regime pre-Wayfair used to use the seller's address to determine tax rates.) But the rise of Amazon and online sales meant that sales tax would go to a few jurisdictions where the sellers were located, rather than be spread out where the buyers were located. As sales tax pays for things like roads, etc., that these remote sellers used, many jurisdictions thought this was unfair, and moved to change sales tax sourcing to destination-based sourcing (i.e., to taxing based on the customer's location). And in the Wayfair decision, SCOTUS said this was acceptable. (At the national and international level, destination-based sourcing has been the law for decades, and has been part of America's tax treaties dating back to at least the 1970s.)
        jxramos 5y ago
        I was just wondering about this. I recently purchased something online, and when I got the email receipt it had all the state and county and city level tax breakdown. I thought to myself, was this tax being charged due to the billing or shipping address? Apparently it was the shipping address when I asked.

by dstick 5y ago

Not sure how it works in the US but in the EU you don't have to register anything. Just keep tabs of what VAT you collected for what country, and then pay accordingly afterwards. No licenses needed.

chrismorgan 5y ago

How do they keep track of who you are? I presume you need a VAT ID of some form? (From https://en.wikipedia.org/wiki/VAT_identification_number#VAT_numbers_of_non-EU_countries https://en.wikipedia.org/wiki/VAT_identification_number#VAT_..., it looks like they’ve crafted it so that many countries’ business numbers can be turned into VAT IDs painlessly, e.g. Canada’s work direct, Australia’s you prefix with a two-digit checksum. I note the conspicuous absence of the USA from the list. I have no idea about US tax.)

scubakid 5y ago

Last time I looked into this, it seemed to me like in the US you would need a separate license for each state you collect sales tax in (before collecting any tax)... and naturally, each state has a different licensing process, and some charge fees to register. For small independent projects, it seemed like kind of a nightmare.

kevin_thibedeau 5y ago
You don't have to collect tax for states you don't have a presence in. They have no jurisdiction outside their borders.
- scubakid 5y ago
  I think due to South Dakota v. Wayfair, states now have more power to define what constitutes "nexus"... so there are all these special rules and thresholds now to keep track of (different for every state) that define whether you have economic nexus and need to collect sales tax there. If you hit the threshold and/or other rules apply, you're obligated to collect sales tax... but of course you can't do this until you have secured a license in that state. This was my read on the situation, but if I'm missing something definitely let me know.
- comex 5y ago
  That used to be the law, but is no longer as of 2018: https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.
  - R0b0t1 5y ago
    A bad ruling. To let it stand, the more reasonable interpretation is that the purchaser has to remit sales tax to their own state. But it may not stand on further challenge. For example, why should the state the items are leaving not be entitled to sales tax?
    - gamblor956 5y ago
      The law already was that the purchaser should remit use tax to the state for purchasers from out-of-state vendors. But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales, much less what rate would apply. Sales tax is basically use tax, but with the burden of compliance placed on the seller. As for why the sellers' state is not entitled to sales tax: in the old-time days, pre-Amazon, this was how many (but not all) tax jurisdictions determined sales tax. (For example, CO's sales tax regime pre-Wayfair used to use the seller's address to determine tax rates.) But the rise of Amazon and online sales meant that sales tax would go to a few jurisdictions where the sellers were located, rather than be spread out where the buyers were located. As sales tax pays for things like roads, etc., that these remote sellers used, many jurisdictions thought this was unfair, and moved to change sales tax sourcing to destination-based sourcing (i.e., to taxing based on the customer's location). And in the Wayfair decision, SCOTUS said this was acceptable. (At the national and international level, destination-based sourcing has been the law for decades, and has been part of America's tax treaties dating back to at least the 1970s.)
      - jxramos 5y ago
        I was just wondering about this. I recently purchased something online, and when I got the email receipt it had all the state and county and city level tax breakdown. I thought to myself, was this tax being charged due to the billing or shipping address? Apparently it was the shipping address when I asked.