7 ms·

How quickly my excitement disappeared when I saw that California was not a member. Thanks for the information; I'm sure there are others, like myself, that have

How quickly my excitement disappeared when I saw that California was not a member. Thanks for the information; I'm sure there are others, like myself, that have no idea such a thing exists.

tzs 5y ago
I'm somewhat baffled by California not being a member. California's threshold below which out of state remote sellers do not have to register, collect, report, or remit sales tax is $500 000/year of sales into California. If I'm a remote seller using the free SST option to handle my taxes in the SST states, and am selling say $300 000/year in California, I will not be collecting any California tax. If they joined SST, I would have to collect California tax even though I'm below the threshold because the deal to get free full service tax handling under SST is that I collect for all SST states. I don't see any downside for California. At the stroke of a pen, they would suddenly be getting tax collected from a ton of remote sellers that fall below the $500 000/year threshold. Same with Texas, which also has a $500 000/year threshold, or New York which is $500 000/year and 100 transactions, or Florida which is $100 000/year, or Illinois which is $100 000/year or 200 transactions.
- gamblor956 5y ago
  California is not a member of the SST because it does not currently tax a number of things that are subject to tax under the SST regime. For example, digital goods are taxable in SST states but not in California. Similarly, there are a number of other product categories where CA's taxability classifications do not match the SST's classifications. Generally, the total tax they could collect from remote (non-CA) sellers below the $500k nexus threshold is not worth the effort it would take to change things so that CA could join the SST, and moreover, it would require significant changes by CA sellers. Generally, those same considerations also apply in NY: the cost burden on local sellers to make the change would dwarf any minuscule tax increase from joining the SST.
  - spockz 5y ago
    Interesting. People bemoan that the market in Europe is too splintered and that the whole of the us can be seen as one market. But all these state differences seem to at least indicate that it isn’t that simple.
    - germanier 5y ago
      Interestingly, VAT law is mostly harmonized in the EU and remittance will get even easier starting July where you can declare and pay VAT on cross-border sales to just one entity ("One-Stop-Shop").
  - tzs 5y ago
    The US could really use some national action on sales taxes. I'd like to see Congress make it so a state can only require remote sellers with no physical presence in the state to collect tax for the state if: 1. Tax rates on remote sales are uniform within a zip code. No more having to deal with "123 Fake Street, Hooterville, 65026" having a different tax rate than "124 Fake Street, Hooterville, 65026". (Worse, I recall finding an example where a tax boundary apparently ran through an office building, so different offices on the same floor had different tax rates!). 2. They adopt a standard for tax classification that will be specified by the Federal government. They don't have to change the classifications used for taxing sellers with a presences in the state, but for remote sellers they have to use the Federal classifications. 3. Rates for remote sales can only change once per quarter, and the data for the quarter must be published one month before the start of the quarter. It must be published on the web, at a URL that requires no registration or fees, in a format specified by the Federal government. The Federal government would maintain a web page that contains links to the state data pages. 4. Sellers can report taxes using a uniform format defined by the Federal government. The format supports reports that cover the taxes for more than one state. The seller can file such a multi-state report with any state that requires remote sellers to collect tax that they owe tax to, and that state will forward the report to the other states it contains data for. The seller can also pay all the tax to that state, and it will transfer the appropriate amounts to the other states. If Congress did this it would make dealing with remote sales tax so much easier.
- quercusa 5y ago
  The $500,000 threshold is, IIRC, for companies that don't have a 'nexus' in California. As of a few years ago, having a single remote employee in California was enough to create a nexus, causing you to be treated as a California-local company.
kmoriarty 5y ago
This is spot on. It's an interesting program perhaps, but unfortunately a lot of states are missing including California, Texas, Colorado, Florida, Illinois, New York, Massachusetts, South Carolina, and we're not seen any uptake from other states toward adoption either.

How quickly my excitement disappeared when I saw that California was not a member. Thanks for the information; I'm sure there are others, like myself, that have no idea such a thing exists.

tzs 5y ago

I'm somewhat baffled by California not being a member. California's threshold below which out of state remote sellers do not have to register, collect, report, or remit sales tax is $500 000/year of sales into California. If I'm a remote seller using the free SST option to handle my taxes in the SST states, and am selling say $300 000/year in California, I will not be collecting any California tax. If they joined SST, I would have to collect California tax even though I'm below the threshold because the deal to get free full service tax handling under SST is that I collect for all SST states. I don't see any downside for California. At the stroke of a pen, they would suddenly be getting tax collected from a ton of remote sellers that fall below the $500 000/year threshold. Same with Texas, which also has a $500 000/year threshold, or New York which is $500 000/year and 100 transactions, or Florida which is $100 000/year, or Illinois which is $100 000/year or 200 transactions.

gamblor956 5y ago
California is not a member of the SST because it does not currently tax a number of things that are subject to tax under the SST regime. For example, digital goods are taxable in SST states but not in California. Similarly, there are a number of other product categories where CA's taxability classifications do not match the SST's classifications. Generally, the total tax they could collect from remote (non-CA) sellers below the $500k nexus threshold is not worth the effort it would take to change things so that CA could join the SST, and moreover, it would require significant changes by CA sellers. Generally, those same considerations also apply in NY: the cost burden on local sellers to make the change would dwarf any minuscule tax increase from joining the SST.
- spockz 5y ago
  Interesting. People bemoan that the market in Europe is too splintered and that the whole of the us can be seen as one market. But all these state differences seem to at least indicate that it isn’t that simple.
  - germanier 5y ago
    Interestingly, VAT law is mostly harmonized in the EU and remittance will get even easier starting July where you can declare and pay VAT on cross-border sales to just one entity ("One-Stop-Shop").
- tzs 5y ago
  The US could really use some national action on sales taxes. I'd like to see Congress make it so a state can only require remote sellers with no physical presence in the state to collect tax for the state if: 1. Tax rates on remote sales are uniform within a zip code. No more having to deal with "123 Fake Street, Hooterville, 65026" having a different tax rate than "124 Fake Street, Hooterville, 65026". (Worse, I recall finding an example where a tax boundary apparently ran through an office building, so different offices on the same floor had different tax rates!). 2. They adopt a standard for tax classification that will be specified by the Federal government. They don't have to change the classifications used for taxing sellers with a presences in the state, but for remote sellers they have to use the Federal classifications. 3. Rates for remote sales can only change once per quarter, and the data for the quarter must be published one month before the start of the quarter. It must be published on the web, at a URL that requires no registration or fees, in a format specified by the Federal government. The Federal government would maintain a web page that contains links to the state data pages. 4. Sellers can report taxes using a uniform format defined by the Federal government. The format supports reports that cover the taxes for more than one state. The seller can file such a multi-state report with any state that requires remote sellers to collect tax that they owe tax to, and that state will forward the report to the other states it contains data for. The seller can also pay all the tax to that state, and it will transfer the appropriate amounts to the other states. If Congress did this it would make dealing with remote sales tax so much easier.
quercusa 5y ago
The $500,000 threshold is, IIRC, for companies that don't have a 'nexus' in California. As of a few years ago, having a single remote employee in California was enough to create a nexus, causing you to be treated as a California-local company.

kmoriarty 5y ago

This is spot on. It's an interesting program perhaps, but unfortunately a lot of states are missing including California, Texas, Colorado, Florida, Illinois, New York, Massachusetts, South Carolina, and we're not seen any uptake from other states toward adoption either.