Ask HN: Sales tax for a SaaS side-hustle

[aravya]

Hi HackerNews - I am going to start my first SaaS side-hustle. Any tips on when should I start worrying/collecting about sales tax. I haven't yet launched and not sure when will I make my first sale.

Any tips from your experience when you started?

Edit: Based in California, USA. All infrastructure located in California as well.

[billconan]

We currently use stripe + taxjar, but it's too complex to handle for a side-hustle in my opinion.

I have heard of https://paddle.com/ , which is a payment service + tax handling. Basically it's like apple's app store. You sell your creation to paddle, and they resell it. So they will handle taxing and you get royalty. it's way easier.

I have never tried them, but if I were to create a side-hustle, I will consider paddle.

[aravya]

Thanks for the advice, been looking at Paddle/FastSpring. If I may ask, did you start with tax collection on day one?

[billconan]

ya, the tax is calculated using taxjar's api on day one and it's reflected on the checkout page. (https://www.taxjar.com/sales-tax-calculator/). But I'm unsure about tax filing, because I don't know about our accounting. (We are a startup).

If this is for my own side-hustle, I wouldn't want to deal with it. It's super complex. Each city has a different tax rate, and you need to file taxes to different states. Each state has a tax free allowance.

[aravya]

Got it, this helps. Been leaning towards Paddle/FastSpring etc.

[billconan]

BTW, I have never heard of FastSpring, is it the same as Paddle?

[aravya]

From the docs, both seem to be equivalent offerings, yet to dig to depth.

[ayoubElk]

I think this largely depends on where you're based, you should provide more information to get advice specific to your situation.

[aravya]

I am based in California, US.

[pletsch]

This really depends on where you're located. Who are you using as a payment processor?

[aravya]

I am based in California, US. I will either use Stripe for payments, if sales tax is not a concern at this point. Else, I would like to go via a reseller like Paddle to help with tax collection/deposit etc.

[pletsch]

I'm not in California and I know a lot of people on HN are, so I'll refrain from giving further advice. If you don't find your answer, I'm sure an hour of an accountants time could help tremendously.

[aravya]

Surely. I am trying to get much information before my upcoming meeting with a CPA so as to be ready with all my questions.