Hacker News Reader

Comment by tppiotrowski | Hacker News Reader

> share 30% of my revenue with them for barely any reason

Does the App Store collect sales tax and remit on your behalf? If it does then I think it's worth it or face registering both in the EU and UK ($0 tax threshold) as well as 50 US states (once you hit the allowed limit) will take you a long time.

View on HN

30% cut for handling taxes? That's wild.

You'd think so until you look into doing it yourself. It's more work than building a simple app.

And you'd thinking would reverse again to the common sense baseline when you realize that alternative providers outside of locked systems don't charge 30%

Can you name a provider? I personally use Stripe Tax for my business and while they will calculate the taxes you owe in each municipality it is totally on you to create an account with each country/state's Department of Revenue and fill out a form quarterly to submit your payments.

This paperwork is what I believe a marketplace like the App Store or Amazon do for you under their own entity that you have to do yourself if you bypass their stores.

Please correct me if I'm wrong.

What's wrong with your Amazon example? They don't charge as much (and that's partially because, while they're big and dominant, they're still not as big/dominant in that market)

You could consider using Galvix, which will connect with your billing system (including Stripe), fetch all the invoices and automatically prepare and file sales tax returns across each of the US states where you are legally required to file, all while providing you full control and visibility over the process. Galvix charges a flat fee of $75 per filed return, which can be considerably more affordable compared to paying a revenue share to other platforms (if tax compliance is the only reason you want to use these platforms).

Disclosure: I am a co-founder of Galvix.

It's 15% for most developers. And it's for a lot more than just handling taxes.

If you live in the US the only entity you need to collect sales tax for is the state you live in. Despite what they may say you are under no legal obligation to collect sales tax for the other 49 states, nor the EU or UK.

I'm pretty sure that was changed by South Dakota v. Wayfair[0]. Most states seem to only require you collect the tax if you have 200 shipments into the state or $100k in revenue because going after a small time out of state e-commerce business over a few dollars of tax probably wouldn't be worth it but a large firm in Delaware refusing to collect tax on shipments into California would probably be hearing from California's government.

If you're shipping overseas, you can probably ignore foreign taxes if you don't have a business nexus there. Especially if you have no desire to ever visit those countries. Basically just leave it up to your customers to pay whatever tax they owe.

[0]: https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.

> Every company selling goods and services to European customers needs to collect value-added tax (VAT), even if their business is not established in Europe.

https://stripe.com/guides/introduction-to-eu-vat-and-vat-oss

> Enforcement of judgments issued by foreign courts in the United States is governed by the laws of the states. Enforcement cannot be accomplished by means of letters rogatory in the United States. Under U.S. law, an individual seeking to enforce a foreign judgment, decree or order in this country must file suit before a competent court. The court will determine whether to recognize and enforce the foreign judgment.

Obviously, its not a good idea to bet your business on the courts not enforcing an EU fine when you can just add the VAT and cost of the handling hassle to the price for EU customers.

https://travel.state.gov/content/travel/en/legal/travel-lega...

The operating idea from governments is that in the digital age, when you sell something to a customer abroad, you're selling to them on their turf and not yours. That's why you're considered liable for sales tax in the first place. Doesn't matter that your own country of residence may or may not care. For all intents and purposes it's as if you physically flew to the country and hand-delivered your software/product to your customer.

It's clearly an awful "patch" to outdated concepts on how commerce works compared to pre-internet, but it's what we have right now.

> Obviously, its not a good idea to bet your business on the courts not enforcing an EU fine

Right. Plus it might hinder your ability to travel freely in those jurisdictions as well which I'd like to avoid.

Reply on news.ycombinator.com