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from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. Sta

by brd 13y ago

from the NYT article: "The bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt." Internet Sales Tax wouldn't be bad if it were uniformly imposed country wide (what amazon has pushed for). This specific bill, on the other hand, sounds like a nightmare. The only saving grace being that at least states would be required to provide "software" - I can only hope that translates to APIs - to calculate taxes. That would make the problem significantly more manageable but it would still drastically increase the complexity of billing solutions for a lot of SMBs. The million dollar threshold is just too low for this to be anything but crushing for small businesses.

wikiburner 13y ago
The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation “a targeted strike against the Internet and a targeted strike against the digital economy.”
- virmundi 13y ago
  Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation. As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.
  - legitsource 13y ago
    In my area, there are state, county, and city sale taxes. You would need a full address and a database of addresses within city limits in order to determine the proper sales tax.
    - dcgibbons 13y ago
      There are many rural areas in the US where the physical address is not in the USPS database and as such "does not exist" (the USPS only has PO Boxes). That makes using any address neigh impossible for accurate tax calculations.
      - jonpeda 13y ago
        Are there multiple sales tax regimes operating within the span of one PO Box? Doubtful than anyone on either side will worry about that case
  - lavezza 13y ago
    A little more difficult than that. I grew up in Pennsylvania. My zip code was for the town next to the township I lived in. There were taxes for stores in the town that weren't levied on the township (two different local gov'ts). Also, PA doesn't tax clothing while Maryland a few miles away does. So every item you sell would have to be categorized in some way (and maybe differently in different areas). So, every delivery address would have to be accurately mapped to multiple, overlapping taxing authorities (state, county, local, school district, etc.) and every item you sell would have to be mapped to multiple tax categories (clothes and shoes not taxed in A, clothes (but not shoes) taxed in B, shoes (but not work boots) taxed in C, etc.)
    - DoubleMalt 13y ago
      That kafkaesk mess just makes the business case more compelling.
    - pc86 13y ago
      To get the most precise taxation possible you would need to get the customer's address and calculate their zip+4. This is ignoring the fact that exemptions would be a nightmare. The only thing I could think of that would be worse than needing to manage that massive API would be if I was a business owner who had to access multiple APIs for DC plus all the states with sales tax.
      - pnathan 13y ago
        > The only thing I could think of that would be worse than needing to manage that massive API would be if I was a business owner who had to access multiple APIs for DC plus all the states with sales tax. So you're saying that putting together that SAAS would be a slog and its very existence would be a moat to other people who don't want to slog through. I.e., a great biz opportunity. :)
        pc86 13y ago
        You're probably right on that one. There is a comment elsewhere in this thread that mentions a SaaS company that handles sales tax automation and reporting, so clearly there is some money to be made.
  - duck 13y ago
    I don't know how common it is, but I do some some areas have a maximum on sales tax. The Kenai Peninsula Borough in AK had one when I lived there. I can't remember the details, but I know with the truck I bought the tax bill was $35 as that was the cap.
  - deleted 13y ago
    [deleted]
  - _delirium 13y ago
    I'm not sure if any of them have nice JSON interfaces yet, but there are certainly 3rd-party services where you can query geographically detailed information on sales taxes, down to exactly which SKUs are taxed at which rates (e.g. what qualifies for a "grocery" exemption). Example: http://tax.cchgroup.com/sales-tax-data/default.htm?cookie_test=1 http://tax.cchgroup.com/sales-tax-data/default.htm?cookie_te...
ScottWhigham 13y ago
Reminds me of the 1099 fiasco a few years back [1]. I think this has to be just as silly if not worse. [1] - http://www.thetechgap.com/2010/12/who-to-blame-for-the-1099-fiasco-here-are-the-culprits.html http://www.thetechgap.com/2010/12/who-to-blame-for-the-1099-...
driverdan 13y ago
> The only saving grace being that at least states would be required to provide "software" - I can only hope that translates to APIs - to calculate taxes. You're talking about the government. They'll put it out for bid which will end up costing 3x as much as it should and be an ActiveX control that no one can use.

by brd 13y ago

wikiburner 13y ago

The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation “a targeted strike against the Internet and a targeted strike against the digital economy.”

virmundi 13y ago
Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation. As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.
- legitsource 13y ago
  In my area, there are state, county, and city sale taxes. You would need a full address and a database of addresses within city limits in order to determine the proper sales tax.
  - dcgibbons 13y ago
    There are many rural areas in the US where the physical address is not in the USPS database and as such "does not exist" (the USPS only has PO Boxes). That makes using any address neigh impossible for accurate tax calculations.
    - jonpeda 13y ago
      Are there multiple sales tax regimes operating within the span of one PO Box? Doubtful than anyone on either side will worry about that case
- lavezza 13y ago
  A little more difficult than that. I grew up in Pennsylvania. My zip code was for the town next to the township I lived in. There were taxes for stores in the town that weren't levied on the township (two different local gov'ts). Also, PA doesn't tax clothing while Maryland a few miles away does. So every item you sell would have to be categorized in some way (and maybe differently in different areas). So, every delivery address would have to be accurately mapped to multiple, overlapping taxing authorities (state, county, local, school district, etc.) and every item you sell would have to be mapped to multiple tax categories (clothes and shoes not taxed in A, clothes (but not shoes) taxed in B, shoes (but not work boots) taxed in C, etc.)
  - DoubleMalt 13y ago
    That kafkaesk mess just makes the business case more compelling.
  - pc86 13y ago
    To get the most precise taxation possible you would need to get the customer's address and calculate their zip+4. This is ignoring the fact that exemptions would be a nightmare. The only thing I could think of that would be worse than needing to manage that massive API would be if I was a business owner who had to access multiple APIs for DC plus all the states with sales tax.
    - pnathan 13y ago
      > The only thing I could think of that would be worse than needing to manage that massive API would be if I was a business owner who had to access multiple APIs for DC plus all the states with sales tax. So you're saying that putting together that SAAS would be a slog and its very existence would be a moat to other people who don't want to slog through. I.e., a great biz opportunity. :)
      - pc86 13y ago
        You're probably right on that one. There is a comment elsewhere in this thread that mentions a SaaS company that handles sales tax automation and reporting, so clearly there is some money to be made.
- duck 13y ago
  I don't know how common it is, but I do some some areas have a maximum on sales tax. The Kenai Peninsula Borough in AK had one when I lived there. I can't remember the details, but I know with the truck I bought the tax bill was $35 as that was the cap.
- deleted 13y ago
  [deleted]
- _delirium 13y ago
  I'm not sure if any of them have nice JSON interfaces yet, but there are certainly 3rd-party services where you can query geographically detailed information on sales taxes, down to exactly which SKUs are taxed at which rates (e.g. what qualifies for a "grocery" exemption). Example: http://tax.cchgroup.com/sales-tax-data/default.htm?cookie_test=1 http://tax.cchgroup.com/sales-tax-data/default.htm?cookie_te...

ScottWhigham 13y ago

Reminds me of the 1099 fiasco a few years back [1]. I think this has to be just as silly if not worse. [1] - http://www.thetechgap.com/2010/12/who-to-blame-for-the-1099-fiasco-here-are-the-culprits.html http://www.thetechgap.com/2010/12/who-to-blame-for-the-1099-...

driverdan 13y ago

> The only saving grace being that at least states would be required to provide "software" - I can only hope that translates to APIs - to calculate taxes. You're talking about the government. They'll put it out for bid which will end up costing 3x as much as it should and be an ActiveX control that no one can use.