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Nope, if you have $100k transactions in a year, it will be $100,000 * 0.005 = $500 not $4,000 (And 0.4% is when you make more than $50,000 in a month)

I too made the mistake of doing amount*0.05 when they provided me the pricing in beta.

This is why I went with them, if I can't do a simple percentage computation I'd rather not do the taxes myself.

And if you're making $1M a year, it will then be $4,000. And I guess that's still cheaper than having your accountant going through all your Stripe documents, computing taxes while also, on your side, having to make sure you're 100% tax compliant. Maybe at $10,000,000 it will start being a bit pricey, but at that point you'll most probably discuss with Stripe to reduce that fee.

When I saw this announcement, I had fully expected these new features to be included as standard - I was a bit surprised when I saw they were charging for them.

That said, I think the pricing is well worth it if you're selling B2C. EU VAT is complicated, and I presume state-level sales tax in the US is too.

If you're selling B2B in the EU however, then all you really need to do it collect and validate VAT registration numbers. Now, the EU API for this is pretty crappy, and has a ridiculously low rate limit - but still, it's not difficult to do. Indeed, I did it in a few hours when I was setting up Stripe for a B2B micro-ISV one or two years ago. I actually think that VAT ID validation should be included as standard - not chargeable.

Hey there, I believe validating VAT numbers is outside of the Stripe tax pricing and part of the Customer Tax IDs API, without any extra charge. Maybe someone from Stripe can confirm?

https://stripe.com/docs/billing/customer/tax-ids

And yes, if you sell only to B2B Europe and everyone inputs their VAT number you're fine (because you actually don't have to charge VAT, it's a reverse charge). Stripe tax do know this nowadays.

But that's actually not so common, people signing up for products usually have no idea what the VAT number of their company is. But they are capable of getting a credit card and giving you a business address.

In this case, you have to compute VAT rates based on the country of the customer.

(This is not an accounting advice, just personal experience!)

> Hey there, I believe validating VAT numbers is outside of the Stripe tax pricing and part of the Customer Tax IDs API

Ah, good to know! It was mentioned in the same TFA, so I had thought it was chargeable with the rest of it.

> But that's actually not so common, people signing up for products usually have no idea what the VAT number of their company is.

Hmm, that hasn't been my experience, on either side of the table. As a biz owner, I get plenty orders from companies big and small, and always get a VAT ID through. When purchasing (on occasion) in my previous day job, I just had to ask someone in accounts what it was.

Yep, that's correct! Tax ID validation is included with Checkout (outside of Stripe Tax pricing).

> If you invoice $100k in a year, you're paying $4000 to Stripe to manage your sales tax.

The pricing on the page says 0.4% - that's $400/year not $4,000

> Now, if you're making $1 million a year, that's $40k It's $4,000 by the above.

> compared to a few thousand you'll pay your accounting firm to do it.

It's not _just_ the money you pay the accountant to do it once, you need to get all of the data about where the customer is purchasing from to your accountant in a format they can use. Also, depending on your accountant, international sales tax is unlikely to be their forté - they might handle different states, but can they handle the varying rules in EU countries?

Yeah, you're right, my coffee hasn't kicked in yet.

For the amount I thought you would pay for Stripe to do that, you could have hired an accountant to figure all of that out for you on an ongoing basis, but for the actual price that's a pretty good deal to not have to think about it.

My opinion on accounting services has always been that it's nothing that a business owner can't do themselves since it's not really that complicated, but it's never worth the time when you can pay someone who already knows what they're doing. Stripe Tax falls into that category for me too, it's cheap enough that it makes it not worth it to do it yourself.

> you could have hired an accountant to figure all of that out for you on an ongoing basis, but for the actual price that's a pretty good deal to not have to think about it.

Even if you have accountants on tap, they may disagree. I did some work on a project where we were needing to deal with tax calculations (was using taxjar). At least one of the questions was about when we should be charging tax on certain 'extras', like... shipping. Their accounting firm said "no, you don't charge tax on shipping". Taxjar was automatically making that charge, and throwing off the expected numbers. After some digging, I found, at least in their primary state, they should have been collecting tax on shipping, but I don't think it was uniform across all the other states.

So... they had an accounting/books person on staff, and this question went up to their 'tax person'. I think it was either a general attorney or a tax specialist or something - this was their 'oracle/decision maker', and they were just flat out wrong.

This probably wasn't the case 20 years ago, when they were putting all their records in to an electronic system the first time, but... rules change. Keeping up with them is not a trivial thing, and when millions of dollars are on the line... you can make expensive mistakes.

The replit guy needs to study your post so he can learn how to handle mistakes the right way

What happened with the replit guy?

replit guy strutted out his hardscrabble kid from Jordan sob myth while "apologizing"

From 2 days ago: https://news.ycombinator.com/item?id=27428400

1. Kudos for handling your mistake gracefully.

2. As of this writing, almost everyone responding to you is using 0.4% as the pricing, when their page shows it's actually 0.5% for the scenario you described ($100k in a year). The lower rate only kicks in if you process over $100k in a _month_.

Unless they've changed their pricing details in the last hour, that's another great reason to let them handle this! Clearly we, collectively, don't have the attention to detail required for this ;)

I'm not sure if I'm missing your comparison, but an accountant doesn't calculate how much/which tax should be paid in real-time based on the business and the user's location and then automatically account for that.

I don't know how much it's worth, but properly supporting tax takes a lot of effort to do correctly in real-time.

> I'm going to leave my shame up here but I realize it's $400, not $4000. Just goes to show you that accountants are just like regular people, and that you shouldn't rely on your accountant doing things off the top of their head not using Excel. The order of magnitude difference really shifts my opinion of it.

Fair play to you!

$4k? Isn't $0.4k as it's 0.4%?

Bad look for an accountant!

So the accountant should be charging less (or stripe more)

I think it would be $400?

Your accountant is not going to build a system for you that verifies VAT IDs and can automatically calculate the tax % on check out I think?

Obligatory Office Space -- https://www.youtube.com/watch?v=3fGHaVn5rGo

Please double check your math before doing a hot take paragraph.