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People care so much about SOPA, but not as much about the Internet Tax Bill, which means every small e-commerce site will be forced to collect taxes for every j

People care so much about SOPA, but not as much about the Internet Tax Bill, which means every small e-commerce site will be forced to collect taxes for every jurisdiction in the US. I seriously doubt all of them have the manpower or money to properly collect sales tax.

ams6110 15y ago
Sounds like an opportunity for a web service. Post total sale and customer's state, get back the tax due and a token. If/when the sale is finalized, post the token back and have them track your taxes due to each state. Monthly, invoice the total amount due, and pay each state, keeping a service fee.
- adgar 15y ago
  I got distracted typing my response so I ended up responding 22 minutes after you. Damn.
- dangrossman 15y ago
  To compute sales tax in the US, you need a full address and product type(s). Not even zip code is granular enough to determine the tax rate. It can vary by county, township, inside/outside city limits, and in all these different combinations (literally thousands for the whole country) what items are subject to sales tax varies region by region too. For example, most states don't tax web design service, but there are a few that do. Most states don't tax advertising services, but a few do, and it depends what type of advertising is being bought. Passing on an address and a total to an API will do the trick 99% of the time, but technically, some of the businesses using that API are going to fail to collect sales tax in some cases where they should. I am hopeful that if enough state legislatures get serious about taxing internet sales, they'll band together to do some nationwide standardization. That kind of thing can't come down from the federal government; congress has no authority to tell a local municipality it can't levy its own sales tax, but state governments can. Kind of like how they all agreed (is it all? I think one or two didn't) to the Uniform Commercial Code so that the basic laws of sale contracts are the same in every state.
adgar 15y ago
> I seriously doubt all of them have the manpower or money to properly collect sales tax. Isn't this usually when someone pipes in and says "seems like a good opportunity for a startup"? It's a complex but well-defined domain - perfect for building a paid service. Input to the API is billing zip code, the type of good/service being sold, the date of transaction, and the pretax amount. The lawyers will point out other factors I don't know about. The output is the tax to charge. Charge by the API call, with different tiers/bulk pricing options for those who need to process many microtransactions versus those who are selling more expensive, shipped goods. Or do people believe that once a credit card number is used on the internet instead of in a point of sale reader, the transactions really should be exempt from any taxes? I agree it's a lot harder problem to solve, don't get me wrong, but doo people really believe the "correct" solution is to just say "we should never have sales tax on the internet because it's different"? Edit: If this law passes, such a service would also be an awesome competitive advantage for some of those startup payment processor companies that I see sprouting up.
- izak30 15y ago
  Yup. SpeedTax, and Avalara are two that I've looked at. Both have SOAP APIs as the primary method of talking to them, and solve the problem in very similar ways.
- X-Istence 15y ago
  It is interstate commerce, as such sales tax should not be collected under current laws.
  - adgar 15y ago
    Current laws, maybe - I'm no lawyer, and won't pretend to know the answer. But I asked if people actually expect that it reasonably should stay that way. I see many people indignant about the idea of collecting sales tax for internet purchases. I'm not sure if that's because of the undue burden on the collector (a solvable problem) or if they really think interstate transactions on the internet should be exempt from taxation forever.
- paulhauggis 15y ago

ams6110 15y ago

Sounds like an opportunity for a web service. Post total sale and customer's state, get back the tax due and a token. If/when the sale is finalized, post the token back and have them track your taxes due to each state. Monthly, invoice the total amount due, and pay each state, keeping a service fee.

adgar 15y ago
I got distracted typing my response so I ended up responding 22 minutes after you. Damn.
dangrossman 15y ago
To compute sales tax in the US, you need a full address and product type(s). Not even zip code is granular enough to determine the tax rate. It can vary by county, township, inside/outside city limits, and in all these different combinations (literally thousands for the whole country) what items are subject to sales tax varies region by region too. For example, most states don't tax web design service, but there are a few that do. Most states don't tax advertising services, but a few do, and it depends what type of advertising is being bought. Passing on an address and a total to an API will do the trick 99% of the time, but technically, some of the businesses using that API are going to fail to collect sales tax in some cases where they should. I am hopeful that if enough state legislatures get serious about taxing internet sales, they'll band together to do some nationwide standardization. That kind of thing can't come down from the federal government; congress has no authority to tell a local municipality it can't levy its own sales tax, but state governments can. Kind of like how they all agreed (is it all? I think one or two didn't) to the Uniform Commercial Code so that the basic laws of sale contracts are the same in every state.

adgar 15y ago

> I seriously doubt all of them have the manpower or money to properly collect sales tax. Isn't this usually when someone pipes in and says "seems like a good opportunity for a startup"? It's a complex but well-defined domain - perfect for building a paid service. Input to the API is billing zip code, the type of good/service being sold, the date of transaction, and the pretax amount. The lawyers will point out other factors I don't know about. The output is the tax to charge. Charge by the API call, with different tiers/bulk pricing options for those who need to process many microtransactions versus those who are selling more expensive, shipped goods. Or do people believe that once a credit card number is used on the internet instead of in a point of sale reader, the transactions really should be exempt from any taxes? I agree it's a lot harder problem to solve, don't get me wrong, but doo people really believe the "correct" solution is to just say "we should never have sales tax on the internet because it's different"? Edit: If this law passes, such a service would also be an awesome competitive advantage for some of those startup payment processor companies that I see sprouting up.

izak30 15y ago
Yup. SpeedTax, and Avalara are two that I've looked at. Both have SOAP APIs as the primary method of talking to them, and solve the problem in very similar ways.
X-Istence 15y ago
It is interstate commerce, as such sales tax should not be collected under current laws.
- adgar 15y ago
  Current laws, maybe - I'm no lawyer, and won't pretend to know the answer. But I asked if people actually expect that it reasonably should stay that way. I see many people indignant about the idea of collecting sales tax for internet purchases. I'm not sure if that's because of the undue burden on the collector (a solvable problem) or if they really think interstate transactions on the internet should be exempt from taxation forever.
paulhauggis 15y ago