4 ms·

The Tax Solution page doesn't make it clear as to whether it handles US State Sales Tax problems?

stevenschmatz 2y ago
Sales tax in the US is exceedingly complex. It's simply out of scope for most companies to tackle without using a specialized sales tax vendor. To properly create a model of just US states' rules, you need to take into account dozens of factors like product type, exemptions, various address types, fulfillment info, and more. You can get to a basic level of compliance fairly easily with state- and customer-based rates in select circumstances. But unless you dig deep, you will get things wrong, and you will only know about it when you get a potentially expensive audit years later. Context: CTO of [Taxwire](https://taxwire.co https://taxwire.co), writing software for sales tax.
- 2Gkashmiri 2y ago
  I ask you too. Is there a us sales tax software development documentation somewhere ? We are looking to expand an open source accounting software into usa but without sales tax, it wont be usable for businesses I suppose.
that_guy_iain 2y ago
> The Tax Solution page doesn't make it clear as to whether it handles US State Sales Tax problems? I will fix that. It handles US State Sales Tax to some extent. So it has state tax rules and thresholds. So will only apply the tax if the threshold or there is a nexus. However, it doesn't have the polygon tax areas that would be needed for cities. For example, Illinois doesn't have SaaS tax but Chicago does. That is very high on my list of things to do. But you could work around that right now by doing it on a customer level. Where you set the tax rate for the customer. But I will definitely improve that text on the tax page to explain how it hands the US tax issues.
- 2Gkashmiri 2y ago
  Do you know any resource on us state sales tax ? From software development pov. From invoicing rules to tax collection, reporting and allied stuff. Or for that matter, sales tax/ vat of countries ? I suppose there should be
  - that_guy_iain 2y ago
    I had to do a ton of googling. It's super super hard. There are various websites that have a collection and then you need other sites for other collections.
    - 2Gkashmiri 2y ago
      Any pointers ?
      - that_guy_iain 2y ago
        https://www.avalara.com/vatlive/en/country-guides/south-america/brazil/brazil-indirect-tax-compliance-and-rates.html https://www.avalara.com/vatlive/en/country-guides/south-amer... is one of them.
- tomphoolery 2y ago
  Ugh...the tax shit in the US is so annoying. At least your e-commerce system is meant for a single kind of transaction, I worked on a more multi-purpose system (that was also open-sourced! https://github.com/workarea-commerce/workarea https://github.com/workarea-commerce/workarea) that handled everything from physical items to buy online pickup in store to digital items to subscriptions. It was a LOT of work getting that tax system in order! We usually recommended our clients work with a company like Avalara or TaxJar (which is now just Stripe) so they wouldn't need to take on the burden of taxes, but a lot of folks didn't and just used our stuff. It got confusing lol...
  - that_guy_iain 2y ago
turnsout 2y ago
Yeah there's a lot of nuance state-to-state, like Illinois charging for certain digital services.
- kayodelycaon 2y ago
  It's worse than that, it can also vary by city.
  - turnsout 2y ago
    It can even vary within the city—in Chicago there's an extra tax on the F&B industry to support Navy Pier, with very specific boundaries.
  - chrismorgan 2y ago
    Once I was long-distance cycling in the USA during the summer, and rather fond of chocolate shakes. Somewhere at a fast food place, I got asked if I was eating in or taking out. I asked what the difference was—it seemed incongruous to ask on such an item when that’s the entirety of the order. My curiosity was rewarded: apparently there was an extra tax in that city on one or the other; so I did whichever was cheaper (and honestly, either drinking it inside, or sitting on my trike). I even came across taxes that were only present in half a city, even—one side of a road but not the other, that kind of thing.
    - fencepost 2y ago
      That's probably not uncommon since municipality borders don't follow county borders.
  - nanidin 2y ago
    It can even vary within a city, and within a zip code - see TID's, NID's, and CID's.
    - kayodelycaon 2y ago
      It's even worse than that. You need a complete address to actually know what the correct tax is.
meekaaku 2y ago
How do ppl currently handle it in big systems like oracle/dynamics or whatever.
- djbusby 2y ago
  Integrate with Avalara or TaxJar
  - calvinmorrison 2y ago
    Avatax is amazing

Sales tax in the US is exceedingly complex. It's simply out of scope for most companies to tackle without using a specialized sales tax vendor. To properly create a model of just US states' rules, you need to take into account dozens of factors like product type, exemptions, various address types, fulfillment info, and more. You can get to a basic level of compliance fairly easily with state- and customer-based rates in select circumstances. But unless you dig deep, you will get things wrong, and you will only know about it when you get a potentially expensive audit years later. Context: CTO of [Taxwire](https://taxwire.co https://taxwire.co), writing software for sales tax.

2Gkashmiri 2y ago
I ask you too. Is there a us sales tax software development documentation somewhere ? We are looking to expand an open source accounting software into usa but without sales tax, it wont be usable for businesses I suppose.

that_guy_iain 2y ago

> The Tax Solution page doesn't make it clear as to whether it handles US State Sales Tax problems? I will fix that. It handles US State Sales Tax to some extent. So it has state tax rules and thresholds. So will only apply the tax if the threshold or there is a nexus. However, it doesn't have the polygon tax areas that would be needed for cities. For example, Illinois doesn't have SaaS tax but Chicago does. That is very high on my list of things to do. But you could work around that right now by doing it on a customer level. Where you set the tax rate for the customer. But I will definitely improve that text on the tax page to explain how it hands the US tax issues.

2Gkashmiri 2y ago
Do you know any resource on us state sales tax ? From software development pov. From invoicing rules to tax collection, reporting and allied stuff. Or for that matter, sales tax/ vat of countries ? I suppose there should be
- that_guy_iain 2y ago
  I had to do a ton of googling. It's super super hard. There are various websites that have a collection and then you need other sites for other collections.
  - 2Gkashmiri 2y ago
    Any pointers ?
    - that_guy_iain 2y ago
      https://www.avalara.com/vatlive/en/country-guides/south-america/brazil/brazil-indirect-tax-compliance-and-rates.html https://www.avalara.com/vatlive/en/country-guides/south-amer... is one of them.
tomphoolery 2y ago
Ugh...the tax shit in the US is so annoying. At least your e-commerce system is meant for a single kind of transaction, I worked on a more multi-purpose system (that was also open-sourced! https://github.com/workarea-commerce/workarea https://github.com/workarea-commerce/workarea) that handled everything from physical items to buy online pickup in store to digital items to subscriptions. It was a LOT of work getting that tax system in order! We usually recommended our clients work with a company like Avalara or TaxJar (which is now just Stripe) so they wouldn't need to take on the burden of taxes, but a lot of folks didn't and just used our stuff. It got confusing lol...
- that_guy_iain 2y ago

turnsout 2y ago

Yeah there's a lot of nuance state-to-state, like Illinois charging for certain digital services.

kayodelycaon 2y ago
It's worse than that, it can also vary by city.
- turnsout 2y ago
  It can even vary within the city—in Chicago there's an extra tax on the F&B industry to support Navy Pier, with very specific boundaries.
- chrismorgan 2y ago
  Once I was long-distance cycling in the USA during the summer, and rather fond of chocolate shakes. Somewhere at a fast food place, I got asked if I was eating in or taking out. I asked what the difference was—it seemed incongruous to ask on such an item when that’s the entirety of the order. My curiosity was rewarded: apparently there was an extra tax in that city on one or the other; so I did whichever was cheaper (and honestly, either drinking it inside, or sitting on my trike). I even came across taxes that were only present in half a city, even—one side of a road but not the other, that kind of thing.
  - fencepost 2y ago
    That's probably not uncommon since municipality borders don't follow county borders.
- nanidin 2y ago
  It can even vary within a city, and within a zip code - see TID's, NID's, and CID's.
  - kayodelycaon 2y ago
    It's even worse than that. You need a complete address to actually know what the correct tax is.

meekaaku 2y ago

How do ppl currently handle it in big systems like oracle/dynamics or whatever.

djbusby 2y ago
Integrate with Avalara or TaxJar
- calvinmorrison 2y ago
  Avatax is amazing