Ask HN: Online Sales Tax – When must you charge for it?

4 points·mrburton··8 comments

I've been curious when should you collect sales tax online? It doesn't seem clear to me.

In the case of a company that allows people to post ads or jobs on websites? Would you be required to collect sales tax? What if your company is based in DE?

I'm going to speak to a lawyer, but I wanted to ask the amazing people on Hacker News as well!

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This is a great question. Fortunately my LLC for my startup is based in a state that doesn't mandate charging sales tax for SaaS products. That being said, I do not go out my way to apply sales tax to those ordering in a state that does. I've never found a clear definition of what to do in these terms; at least, not without spending serious cash on a lawyer.

Hope you don't mind me asking, which state are you based in? DE?

WI.

From what I gather, WI has Nexus and you should be collecting sales tax (depending on what you're providing). Do you mind me asking what you sell online?

You're right about nexus, but I sell a non-tangible SaaS product (no hard-ware, no CD download, etc). It's a grey area, but I think I'm okay. I'll verify at some point soon. It's still a side-thing w/ little to no revenue.

There are services out there such as Avalara AvaTax that will handle this for you [0]. Calculating sales tax and VAT internationally is extremely complex, it's probably something you wouldn't just want one person or lawyer doing.

Side not, this title should be prefixed with "Ask HN: Online Sales Tax – When must you charge for it?"

[0] https://www.avalara.com/products/sales-and-use-tax/avatax-2

Thank you, I updated the title.

Take a peak at https://www.taxjar.com/ You can view by state as well - https://www.taxjar.com/states/

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