[kels]

What no one is talking about here is how this would be handled, especially for a small online sellers. There are almost 10,000 tax jurisdictions (https://www.washingtonpost.com/blogs/fact-checker/post/mccon...) and you're not allowed to collect sales tax unless you register for that jurisdiction. There is also a fee collected by most jurisdictions to register and most make you send in periodic reports, even if you didn't collect any taxes for them.

[myrandomcomment]

Read the story...

"...South Dakota, whose law requires retailers with more than $100,000 in sales or 200 transactions annually in the state to pay a 4.5 percent tax on purchases"

"..Kennedy’s majority opinion strongly suggested the measure was constitutional, in part because it has the $100,000 threshold and doesn’t try to impose retroactive taxation."

A clear bar is set for what is covered here and what is a burden.

[tallanvor]

Here's the problem with that $100k/200 transaction law. Small businesses have to do one of three things:

1) Assume that they will hit one of those limits and collect tax from the start. Once they've told the customer that they've been charged tax, they will have to file anyway. I don't see anything that says the first $100k/200 transactions are exempt from the requirement. And if you hit the limits this year, you'll have to collect taxes no matter what from my reading of the bill.

2) Keep track of how much has been sold to South Dakota residents and stop selling if they hit the limits.

3) Give up and tell South Dakota residents that they're out of luck and that a state with less than 900k residents isn't worth putting up with the filing hassles.

If I'm not sure if my business will take off, I'm probably not interesting in paying taxjar or someone else $5000/year just in their filing fees (to make sure I'm covered), so I'm most likely to go with option 3 and start by limiting sales to my home state, those with no sales tax, and those that aren't going to try and make me collect the sales tax for them.

[verelo]

This ultimately comes down to the fact that each state in the US behaves like an individual country in many ways, especially when we talk about taxation. It doesn’t jive well with the current lay of the Internet, and it will be interesting to see the reaction here. In Australia a single GST was introduced (long ago, July 1 2000) and it’s a big simplification for online transactions. The catch: everyone would need to agree to a number.

[nsnick]

"jibe well"

[verelo]

Thanks, too long back to correct it now :(

[alfredallan1]

This is probably a very simple question, buy will someone please clarify: $100K in sales - does that mean: 1) $100K worth of (3rd party, for an ecommerce platform) product sold via the platform, or 2) $100K revenue accruing to the platform, as the commission earned on sales of whatever amount.

[mlindner]

$100,000 in sales is a very low bar. That's equivalent to a business with a single employee, the owner, and they're probably not making a livable wage yet.

[ajross]

$100k of South Dakota revenue is either an almost exclusively local single-owner business or a much larger internet shop.

But regardless, that kind of number is a full time job. If you're selling over the internet and making a full time job out of it, you can handle computing sales tax for SD residents. Yes, it's burdensome. Yes, it would be good to have a simpler federal framework for this. No, it's not the end of the world.

"No tax on the internet" sort of made sense in 1997 when it was a new and exciting market and we wanted to see what would happen. Now, it's just a giant subsidy for Amazon. We can put that money to better uses.

[ballenf]

I think you've got it kind of backwards. The absence of tax collection is what allowed Amazon to become Amazon and this change is now a barrier to a new entity challenging Amazon.

Amazon voluntarily started collecting taxes nationwide without a blip to its bottom line.

The new law will in fact put Amazon's first-party goods in parity with 3rd party sales. Third party sellers could often undercut Amazon's own pricing due to the disparity.

This tax change is a huge win for Amazon on many fronts. Any protests they make to the contrary are strategic, imo.

[jjeaff]

It's a win for a part of Amazon's business, the part that stocks and sells its own products and is already collecting taxes. It's a loss for the other, larger side that gets paid to stock and ship products from 3rd parties who by and large do not collect tax.

This makes it tougher for these small businesses to compete and since Amazon takes 15% of those sales AND makes money off them for fulfillment services.

[pishpash]

Perhaps. It could also incentive a new round of internationally based direct-to-consumer dropshippers to take e-commerce to the next logical level, now taking advantage of the differential in international sales tax regimes. Aliexpress is an example.

[smallnamespace]

All this would do is create an opportunity for a SaaS startup or existing payments provider to offer collecting the correct amount of tax for you.

I personally worked on this sort of problem for a large company; most of the work is in figuring out what the business logic ought to be; turning it into code is (largely) trivial.

Figuring out the logic only needs to be done once, and the payments provider is the natural place for it to live.

[SyneRyder]

Indeed, several already do this - Fastspring, Paddle, and there are services like Taxamo (although I'm not sure if Taxamo actually remit the tax on your behalf, or are just an API to calculate what your obligations are).

[riknos314]

It could actually be a huge win for Amazon's third party sellers as well, as services such as FBA could handle the tax collection on behalf of the third parties. It just adds to the value that Amazon can provide in its services for sellers.

[Eliezer]

The stock market disagrees with you.

[tzs]

> $100k of South Dakota revenue is either an almost exclusively local single-owner business or a much larger internet shop.

Note, though, that for South Dakota it is $100k in annual revenue or 200 transactions per year.

Consider a company selling a subscription product/service for $5/month.

If they had a mere 17 customers in South Dakota, their South Dakota annual revenue would be a mere $1020, but they would have 204 transactions per year.

This assumes each re-billing on a subscription counts separately. If it could be counted as a single $60 sales that is merely being billed in 12 equal parts, then they would only have 17 South Dakota transactions.

[SyneRyder]

I think this needs to be upvoted more. The 200 transaction threshold is very low for low priced products - I sell a $20 Photoshop plugin, and $4000 is not much revenue to suddenly have to register for & remit South Dakota taxes. Apparently Vermont will have the same 200 transaction threshold [1].

In practice though, indie retailers will use reseller services that collect & remit the taxes on their behalf, in return for a ~10% cut. I use FastSpring for my shopping cart, others use Paddle or Gumroad. The EU has had similar tax laws on internet sales since the mid 2000s, and Australia will enforce their own 10% internet tax on non-Australian internet businesses from July 1st.

[1] https://taxfoundation.org/amicus-brief-south-dakota-v-wayfai...

[boomboomsubban]

> - I sell a $20 Photoshop plugin, and $4000 is not much revenue to suddenly have to register for & remit South Dakota taxes.

I wonder if Adobe publishes how many noneducational Photoshop licenses South Dakotans buys a year. As I highly doubt you're in any danger of needing to pay SD tax.

[justonepost]

At like a 10% profit (in the best case), that's a pretty terrible full time job.

[naikrovek]

You are grossly underestimating the markup on goods sold online.

[halr9000]

> Now, it's just a giant subsidy for Amazon.

But it's not. This line is reasoning is very outdated.

They have built a massive network of warehouses all over the country, and that's the physical presence that a state sales tax collection clause needs to come into effect. Amazon has been charging people sales tax in many states for a few years now. (I wish I had a number of states, but top jazzy to look it up.)

[PrimHelios]

>But regardless, that kind of number is a full time job. If you're selling over the internet and making a full time job out of it, you can handle computing sales tax for SD residents.

But it isn't just SD, it's hundreds, if not thousands of jurisdictions. One person doesn't have that kind of time.

[bordercases]

Thanks for your assertions. Have you ever acted as a small Internet shop employee in close connection to the 'executives'? I have. From what I have seen, because people in small shops have to be generalists you are often splitting the attention of the people with the most comparative advantage to innovate by increasing their regulation burden. It isn't even the fiduciary cost of the tax that is impressive even though that's unfortunate that their mark is so low. It is the labour cost that adds up when people have to take time away from actually manufacturing product during early stage work.

[pessimizer]

> Now, it's just a giant subsidy for Amazon.

It was always just a giant subsidy for Amazon.

[pbreit]

The computation is simple. Isn't the harder part the filing & paying?

[nemo44x]

I think that's the point. It's supplemental income for someone - not a real business.

[tgb]

That's not their entire sales, that's their entire sales to people in South Dakota.

[Obi_Juan_Kenobi]

If you do business nationally, with a million in revenue, $100k for South Dakota might not seem too bad, but $100k for California or Texas starts to feel really claustrophobic.

It's an interesting precedent.

[markdown]

It's $100k or 200 transactions. 200 transactions is just 17 customers with a monthly subscription.

[megy]

For one state, so 50x that, which is $5m.

[Animats]

See [1]. Sales tax as a service is available from seven different providers. Shopping cart integration is available. You pay one bill, they handle the rest.

[1] http://www.streamlinedsalestax.org/

[lightbyte]

So this is another needless regulation that creates more useless rent-seekers?

[mikeash]

Governments need to fund their operations, and allowing some businesses to dodge taxes because of arbitrary geographical differences is unfair and distorts markets.

[shagie]

One should note that its not the businesses that are dodging taxes, but rather citizens of the state that are dodging taxes (and not reporting them). From The Tax You Probably Forgot To Report ( https://www.forbes.com/sites/ashleaebeling/2013/04/15/the-ta... )

> Think you got a great deal not paying sales tax on your online purchases last year? In most states, there’s a pesky tax called “use tax” that you are supposed to pay in lieu of sales tax if you buy stuff out of state or online--and bring it in state. Theoretically, you’re supposed to root through all your receipts and credit card statements, calculate what you owe and report it on your state income tax return.

Or http://www.pmbusinessadvisors.com/use-tax-reporting-requirem...

> Use tax is a tax imposed on the use of taxable items and services in a state when the sales tax has not been paid. For example, use tax would be due if taxable property is purchased from a seller located outside of New York, the property is used in New York, and sales tax was not paid on the purchase. With online platforms and sales being increasingly popular currently, this concept is significant. Remote retailers that make sales into a state but do not have any presence there (i.e. an office, store, storage, employees) may not be registered to collect sales tax in that state because of the lack of presence there. However, the use tax reporting requirement that has been recently implemented by a number of states requires remote retailers to notify their customers that they may owe use tax on their purchases.

[mikeash]

Good point, technically the businesses haven't been doing anything wrong, it's really more of a loophole than a dodge.

[Dylan16807]

The problem is not the general idea of paying sales tax. It's the complication of having ten thousand different sales tax jurisdictions. Complying with the law should not be such a nightmare you need to hire a middleman.

[gwright]

It is way more complicated than just 10,000 jurisdictions:

    - mapping an address to one or more jurisdictions
    - digital deliveries might not have a shipping address
    - tax rates often depend on the type of product
    - product types have different definitions in different jurisdictions
    - some taxes are time dependent (back to school tax holidays)
    - some buyers are exempt in some jurisdictions for some products

[azinman2]

Why not? We pay for all kinds of professionals to help us navigate what’s required to run a business, pay taxes, and follow the law.

[Dylan16807]

"It's already complicated" is a very poor argument to justify increasing the complication a hundredfold.

[pas]

Yeah, and it makes a barrier to entry, so a lot of potential economic activity does not take place, or it takes place off the records, and generates no tax revenue.

[mikeash]

I don't think the proper solution to that is to just declare that you don't have to pay taxes at all when you sell to someone far enough away. Simplify things if needed, but don't give a nonsensical advantage to certain businesses.

[curun1r]

The proper solution is to put the onus on the payment networks. They're large enough to build out support for this issue without it being overly burdensome. Internet retailers should only be required to report what customers bought and whether taxes were collected. Then payment networks can report to the states who can send taxpayers a report of the use taxes they owe.

[SubiculumCode]

How does one legally define where one buys a product? Shipping address? Home address? Point of sale?

[mikeash]

Seems to be the shipping address.

[davidgh]

Some state sales tax rates are destination-based and others are origin-based. Since sales tax was not designed to consider the internet, things get complicated fast.

[SubiculumCode]

Then is shipping to an intermediary low-tax address (as a service) followed by a separate shipping event to your home an illegal circumvention?

[scarface74]

So any service that makes it easier to do business is a “rent seeker”? Does that include Square? AWS? Every site that does e-commerce web hosting?

[michaelmrose]

I think its a rent seeker when uncle sam either dictates you give them money or buries you in shit you have to pay acme shovel co to dig yourself out of.

I think its more tenable for governments to provide an optional sales tax as a service and remit the money to the states. One singular report to file one party to pay.

[User23]

If the service they're providing is only necessary because of artificial barriers, then basically yes. The banking cartel that controls the payment system is a huge fan of collecting economic rents, yes.

[scarface74]

So how do you purport to have a global electronic payment network?

[Dylan16807]

If the EU can manage instant bank transfers that cost less than a penny, the US can manage it too.

[seanp2k2]

VISA and MasterCard do pretty well from what I hear. PayPal too.

[eli_gottlieb]

So the internet imposes a moral requirement for all states/provinces to have uniform sales taxes or value-added taxes?

[michaelt]

Not moral, but some would say being a single country imposes a certain practical requirement that the taxes not be too complicated, if we agree commerce is a good thing and waste is a bad thing.

[dsr_]

The United States of America is, in the terms of other countries, 50 states that have given up certain powers and responsibilities to a federal government but retain their own powers, including the ability to set tax policy inside their own borders.

The Commerce Clause gives Congress the power: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." This has been widely construed as meaning that states cannot make taxes that affect other states' citizens unless they are doing business in that state.

The Supreme Court has just ruled that their earlier ruling (that Store A had to have some physical presence in State S in order for S to require A to charge sales tax) is wrong, and no such physical presence is required.

[pseingatl]

More importantly, it is now clear that American States can tax non-residents, even FOREIGN non-residents who have no connection with the U.S. whatsoever. There will be collateral consequences to this decision. For example, why should I have to pay out-of-state university tuition if I became a state taxpayer due to the sales--and soon to come other--taxes? Drive a car into my state? You have to pay a roads tax. It will be interesting to see how far this goes. Long-arm jurisdiction will become more robust, at the least; another rationale for diversity jurisdiction is removed.

[astura]

Congress has the ability to nationalize sales tax collection and remittance for online purchases. In fact, there have been bills introduced in the past that proposed to do just that.

We might actually see some movement in this direction now.

[eli_gottlieb]

It looks like people are downvoting @dsr for, I dunno, being a pedant or something, but I think their point is important: Americans really do seem to value the extreme heterogeneity, and even outright waste, of having 50 different jurisdictions to do business in, rather than passing uniform laws at the federal level.

[owenversteeg]

Although I do agree that in this case it's a bit of a disaster and going to be a huge pain, sometimes it is nice having 50 different jurisdictions.

Most things are pretty similar state-by-state, but it can be really nice being able to pick your laws if you have to. Maybe you love weed and you want to pick a state with legal weed. Or maybe you like drones and want to pick a state with fewer drone laws. So many things differ state-to-state, from REAL ID to trans rights to surveillance to taxes to guns to driving age to social aid to public transit. Gay marriage, slavery, and interracial marriage were all issues of the past but they were very important in their day too.

I do think it's an important part of what makes America America, and being able to "pick your laws" is an amazing freedom that most people don't have.

Now, the actual ability to move wherever you want can sometimes be limited. If you're in Vermont and you want New Hampshire laws, well, that's easy. (Differences: weed, guns, advertising, taxes, many more.) But if you're in Maine and you want Hawaii laws, a move like that probably isn't doable. Still, I think it's a valuable freedom.

[padobson]

I spend $1000/yr in effort and fees on my federal income tax return. There's nothing especially practical about letting the feds take care of things.

[sp332]

Where do you get to see the list of providers?

[Animats]

http://www.streamlinedsalestax.org/index.php?page=Certified-...

[sp332]

Thanks. I'd swear that button only gave me a menu when I clicked on it before.

[DoctorOetker]

With fee, do you mean that you have to pay a yearly fee for simply registering as possibly collecting taxes for that jurisdiction? Not sure what most is, but ~30-50 pay-to-play fee's a year will certainly hurt the small businesses.

I think it's good to start harmonizing the sales taxes, but such a fee (if I understand you correctly) should be removed...

[kels]

I'm in Colorado and I had to pay $66 up front. $50 is a deposit and $16 is the fee every two years. I see that California doesn't have a fee but I know other states do.

TaxJar will register for you in the States that you need for ~$100 per state, plus their fees (https://www.taxjar.com/state-registrations/) -- I'm sure Avalara does something similar but that's ~$5000 that a small business probably won't have.

[cmurf]

Colorado has home rule cities with their own tax license, rules, submission. Even due dates van be different per municipality.

It's a system designed ages ago, not only pre-internet, but even pre-car.

For internet businesses it's really unworkable to require they submit anything other than state sales tax but even that is onerous due to registration fees and old and nonstandardized submission systems.

[DoctorOetker]

what do you think about this idea ? :

https://news.ycombinator.com/item?id=17367669

[beberlei]

suddenly the EU VAT system looks awesome :-)

[Tloewald]

The US system of local sales taxes doesn't look awesome ever. If there were one economic reform I would push in the US it would be advertised price is final price (i.e. if you say "I'm selling this for $9.99" then that's all you pay, and the taxes are all inclusive) this would pretty much force underlying tax reform as businesses lost their shit having to deal with the insanity.

Note that the disaster area that is US regulatory overlap means passing a law like this is probably impossible without constitutional amendment.

Right now in the US it's often difficult, and sometimes impossible, to know how much you'll actually be paying in any transaction. It's ridiculous, and from a pure Econ 101 perspective it's a first order problem in the market.

[breischl]

I've worked on price display for a large-ish company. The funny thing is that our company, and probably others, would really like to show all-in pricing! It's easier for us because we wouldn't have to do things differently in different countries.

But we can't make the switch unilaterally because if we're the only ones doing it, then we look more expensive than everyone else and lose sales. Even if the final price is the same, consumers tend to just look at the up-front cost when making buying decisions. So we'd need everyone in our market to switch, or nobody can. So basically it would need to be mandated by the government.

[Tloewald]

Yes it’s nuts and it seems like a popular thing to fix electorally. I think that it’s a case of lack of political imagination.

[astura]

And unless you are extremely familiar with local tax law you have no idea which purchases are even going to be taxed. If you go to the grocery store and buy the following:

tampons

raw chicken

rotisserie chicken

prepared sandwich

bread and cold cuts

toilet paper

condoms

20 oz soda

12 pack soda

juice

milk

prepackaged donuts

donuts from the bakery

cat food

beer

DO you know which of those items are going to be taxed and at which rate? Me neither!

>Note that the disaster area that is US regulatory overlap means passing a law like this is probably impossible without constitutional amendment.

I actually don't think so. The FTC covers truth-in-advertising laws.

https://www.ftc.gov/news-events/media-resources/truth-advert...

[anonymous5133]

You just use tax software to do it. Then you can just classify each item. Most small businesses only sell a few thousand products and others sell less than a hundred. How does it take to classify all of those? A few hours tops. After that the software does the rest....condoms going to 32932 zip...taxable...raw rice going to 92322 zip...exempt. very easy for a computer to do. The software provider would do all the research.

[RobAtticus]

I think his point was as a consumer it is difficult to know your final bill since some items are exempt, some are taxed at a lower rate, etc.

[astura]

Yes, exactly.

[hakfoo]

This still requires vendors to correctly mark up their products-- to a level of detail that handles all the local rate differences, and shopping carts to be retooled to store said classifications and pass them to whatever tax-calculation service you need. Not to mention paying for the service to query.

It's probably less of a problem for someone starting from zero, but I'd imagine there's a type of vendor that's a huge nightmare. The firm that basically said "we can sell anything we can get from our vendor", and stocked their cart with thousands of SKUs, many of which exist only as lines in CSV files so they may not even know what they are offhand. The cart was probably built in the Eisenhower administration so good luck extending it.

It would be interesting to see some states offer a "trade convenience for savings" model-- rather than try to navigate a maze of regional rates and product categories to decide if a widget is taxed at 8.2% or 8.3, just file a one-page form and charge everyone 8.5% on everything. Saying "pay us $50 per year more in taxes, rather than spend $50k and ongoing service subscriptions to optimize the rates down to the penny" is a pretty compelling argument.

[astura]

1) I was talking about a consumer in a grocery store not having a clue as to what they'll actually pay until they get to the register, not a company shipping products.

2) Zip codes have zero to do with taxing jurisdictions; zip codes merely tell you where the closest post office is.

[Tloewald]

Certainly trying to use Truth in Advertising was always my first thought, but Truth in advertising laws are pretty toothless and I imagine any attempt to do something like this using that mechanism would get tied up in the courts for a long time.

I would love someone to at least make the case -- it seems like a non-partisan thing, surely the free market types should be in favor of price transparency, while liberals should be against misleading consumers.

[testvox]

The free market types I know are generally opposed to requiring tax be included because they think it would hide the "true" cost of the tax from consumers. They seem to like when a consumer is disappointed by the difference between the base and "plus tax" price because they think it will motivate people to try to get sales taxes reduced or eliminated.

[flukus]

> The free market types I know are generally opposed to requiring tax be included because they think it would hide the "true" cost of the tax from consumers.

In this case the "hidden cost" would be clearly printed on the receipt.

[pessimizer]

I agree, but only if they don't include the merchant's profit margin in the price, either.

[ecommerceguy]

Tax Increment Financing is used so much (abused) by local jurisdictions for infrastructure improvements, sales tax will never go away. It's a mess.

[jmj42]

TIF is a property tax financing scheme. Abuse or not, its use has very little impact on sales tax.

[jessaustin]

It has a very large effect on what shows up next to the "sales tax" label on your receipt. Sure if they were honest it would say "fee to make the developer's interest payments", but it never says that.

[robryan]

Yeah Australian GST is a flat 10% and doesn’t allow you to display ex GST pricing to the end customers where it applies.

I recall going to a cafe in India, looking at the menu price, handing over cash then being asked for more. It would be impossible for me to account for which taxes would be applied at what rate to work out the end price before paying.

[davidgh]

While I appreciate the simplicity of “tax-inclusive pricing”, I think that “tax is added” vs. “tax is included” pricing is highly important for transparency. Frustrating as it may be for other reasons, I like that a buyer is reminded every time they walk up to checkout how much they are paying the government for the privilege. I think that’s part of the reason why EU VAT rates are so much higher than US sales tax rates. With tax-exclusive pricing, buyers are very aware of the tax.

I also think it sets it up so that sales taxes are actually paid by the intended target - they buyer. When Ireland changed its VAT rate from 21% to 23%, I suspect very few coffee shops changed the price of their latte from €3.00 to €3.06. So it feels like the tax increase can end up being paid by the seller, not the buyer.

[pas]

As someone from (and in) the EU, I'm very much aware of the VAT. It's almost literally printed on every fucking thing. It's certainly very much apparent on any bill, receipt, invoice, sales printout and whatever piece of paper or data we get during economic exchanges.

Since VAT is a tax that is paid by the customer but usually remitted to the tax authority by the merchant, it has to be shown on the receipt.

[oldcynic]

When I'm buying privately I care about the price I pay - not the price a business can pay when reclaiming the VAT. It's not like VAT is going away with next change of govt, or even with Brexit. Everything gives you a receipt breaking out the VAT or shows it in the online basket and checkout for those that care, or reclaim, so I don't see how it lacks transparency.

Why does it matter who of buyer or retailer covers the few pennies, or if retailer makes a small price change to stick at a .99 or .00 price point? Retailers have done this forever in both directions.

[esolyt]

> Note that the disaster area that is US regulatory overlap means passing a law like this is probably impossible without constitutional amendment.

Why would a law like that contradict with the constitution?

[soared]

Its worst at the liquor store where taxes are some significant percentage more, so the price is $18.99 but I know I'll pay some amount between $22 and $27.

[wildmusings]

I prefer it the way it is. Invisible taxes will be raised higher than visible ones.

[bigtunacan]

This is so true. I'm not a smoker, but cigarettes are a great example of this as they are often sold as "tax priced in" because they are taxed at such an extra high rate compared to standard sales taxes.

As an example; the sales tax rate in my region is 7%, but cigarettes are then flat taxed $1.36 a pack so roughly 20% tax at the state level, plus often times there is an added "local option tax" which adds on top of this.

[windows_tips]

Hmm, always 30% or sometimes 8%?

[dragonwriter]

It's very simple how it would be handled:

(1) very large organizations with retail over a wide area as a core business focus would handle relations with taxing jurisdictions directly as a central function.

(2) medium scale organizations would outsource tax compliance to specialized vendors that would handle it.

(3) very small organizations would either do the same as medium orgs (assuming vendors handle them) or just not sell into many jurisdictions.

[anonymous5133]

Agree lots of people here are overly sensational. In the most basic terms it simply consists of getting somethig like avalara, configuring it correcrtly and then avalara does the rest. No different than setting up quickbooks. Yet people here make it sound like it is the end of the world.

Truth be told most here are just mad that their online sales tax loophole is getting closed.

[vinceguidry]

3 would be a source of political pressure for those jurisdictions to simplify tax compliance.

[gnopgnip]

There is a threshold in the South Dakota bill for $100k in sales in the state. Small online sellers are not affected

[arbuge]

That's just the exemption SD chose to apply, and which they could change at any time. Other states may choose to not have such an exemption.

You are also now open to tax audits from all other states, since you may need to prove you are below any exemption limit.

It's a bad deal for small business no matter how you slice it. I think that if your revenue is below ~$100m annually, the future is beginning to look bleak. Very helpful to the big players like Amazon in killing off small competition.

[omfg]

That’s a bit of a leap. It looks like fully automated compliance from the existing services. From collection to remittance is about 3-5k a year. With more competition it will likely become cheaper.

[michaelmrose]

Why would it? Why in particular wouldn't the fact that you are required to pay for their services allow the entire industry to jack up prices substantially?

Why wants to win by being the asshole who did it for $500 instead of say a percentage of revenue?

[wildmusings]

>Why would it? Why in particular wouldn't the fact that you are required to pay for their services allow the entire industry to jack up prices substantially?

Basic economic principles. You compete by lowering your price. So more competing providers would make it highly likely that price moves closer to cost, because there is a higher chance that one will defect from the current price structure.

To put it plainly. You run a gas station but the guy across the street gets all the customers. You both charge $3 but your cost is only $2. What do you do to get more customers? Lower the price.

[michaelmrose]

Please see the price of epi pins

[seandougall]

> With more competition it will likely become cheaper.

I wish I shared that faith in market forces. What seems more likely to the cynic in me is that a big player like PayPal will incorporate it into their merchant services, obtain some overly broad patents on the process, use those to stifle competition, and make the service a nominally cheap add-on (but only for their own customers).

[bluepeter]

100k or 200 transactions... that 200 bar is pretty easy to hit w/ monthly subscription SaaS providers.

[gnopgnip]

The case was about whether physical shipments using common carriers constituted a local nexus and required collecting local sales tax. SaaS and other services without a common carrier would not meet that standard.

[michaelmrose]

17 people for 1 year or 9 people for 2 years whichever comes first.

[tomrod]

Sounds like a business opportunity.

[notheguyouthink]

Funny, I hear anti-competitive not business opportunity.

It's a business opportunity now, but as with many government laws, in the future businesses end up depending on government forcing their markets existence. So then they lobby for the government to keep the system, even if it's out dated or badly thought out. We can't stream line anything, because entrenched businesses don't want anything to change.

It makes me sad the world is this way.

[DoctorOetker]

it really is sad,

but a petition is always an option?

https://news.ycombinator.com/item?id=17367669

[johns]

Avalara just went public and is benefitting from the ruling: https://www.geekwire.com/2018/avalara-stock-soars-following-...

[ecommerceguy]

Tax Jar is another. I dont have a problem paying the fees but as stated above, the filing in all jurisdictions is such a pain it will knock out alot of small sellers online. The seller will have to pay a bond in nearly every state and some cities which can add upto thousands of $$. No clue how the Chinese sellers will handle it, they probably just wont remit.

I think eBay and Etsy side hustle sellers especially should be worried. This helps large internet retailers like Amazon. They have the systems in place to charge and remit sales tax for 3rd party merchants, they've just been waiting until this ruling happened.

[ggm]

If only we had .. machines which can look up an item in a huge list of items and find some specific properties about it.. just think! We could sell maybe two or three of these machines a year.

[Shivetya]

then states need to step in and set "online" rates that trump the local rates. many states already do similar with Ad valorem taxes on automobiles. Taxes aren't your only problem, there local restrictions on items sales that one area considers hazardous or regulated that another doesn't even acknowledge.

[joezydeco]

Watch Amazon offer it as an AWS service...for a 0.2% fee.

[anonymous5133]

Or just buy out avalara and take over the whole market.

[coldseattle]

That’s exactly the point. Only the biggest companies with large pools of compliance accountants and attorneys will be able to do business.

[skybrian]

Unless it can be outsourced? Companies providing an Internet storefront that takes care of sales tax should do well. Could Stripe do this?

[SyneRyder]

I mentioned it elsewhere in this thread too, but some companies like Paddle & Fastspring (and I think 2Checkout/Avangate) already do this.

As far as I know, Stripe doesn't do this, they only provide integrations for services that will calculate your tax obligations. (My guess is governments will eventually force Stripe to pay the taxes themselves directly.) Here's Stripe's page with tax calculation integration options:

https://stripe.com/works-with/categories/tax-calculation

[azinman2]

Until you pay one of many existing SaaS providers a modest fee to do this for you.

[cityhomesteader]

> What no one is talking about here is how this would be handled, especially for a small online sellers.

Strange huh? Seems like the little guy is being attacked by the elites in every manner possible. Whether it is small online sellers, small time youtubers, independent freelance journalists, small time artists, writers, etc, seems like the rules are being changed to favor corporations and the heavy hitters. Heck, even search and social media results/algorithms are changing to cater to corporations.

Odd that this story hasn't gotten that much traction anywhere either. You'd think something this important would be all over hacker news and social media. I remember Bezos used to be very vocal whenever internet tax issues came up. He's been awfully quiet. Oh that's right, amzn is no longer a small time book and music seller.

[bluepeter]

> You'd think something this important would be all over hacker news and social media

It's the top story on... Hacker News.

[peter303]

I remember a service already available in the 1990s to compute and collect proper tax in every US zip code. Its not rocket science folks.

[jhayward]

Well, since zip codes don't map to taxing districts it's pretty much screen doors in submarines. Not possible to compute taxes via zip code for the 50 US states plus territories.