[thelist] Tax rules to destroy the entrepreneur..

David Kaufman david at gigawatt.com
Tue Oct 18 22:44:23 CDT 2011

Hi Bob,

On 10/17/2011 12:45 PM, Bob Meetin wrote:
> One of my clients has me building an eCommerce system ...it's
> now configured so that shipping/charges are calculated correctly from
> any of the dozen + warehouses in various U.S. states. Hurrah... :)
> So now the nasty stuff - taxes. There may be some simple states, but
> Colorado is not one. What a mess! In the U.S. you are obligated to
> charge sales tax for anything that crosses state lines according to
> state rules, then additionally if the sales fall in special local,
> district, city transit areas. Just for Colorado, there are over 1200
> lines in the .csv file we purchased for configuring taxes. It took half
> a day to write a script to import this, beats 2 days of user interface
> with the keyboard...

Welcome to state sales tax hell!  We also built a shopping for a company 
that both owns some smaller companies in various states and itself has a 
physical operations in several states.  Of course the website is all 
unified into one big happy dot-com, but you're right: the rules 
governing tax collection and payment has way too much to do with where 
your bricks are mortared for my taste!

My advice to them was to partner with a fulfillment service in a 
no-sales-tax state and let them resell and ship everything :-) 
Fortunately they followed their lawyers' and accountants' advice 
instead, but now we're eyeball deep in the state sales tax maze too.

New York also has state, county and municipal tax zones that can get 
quite crazy.  In a misguided hope of avoiding complexity and cost, we 
were directed to use a tax data provider's HTTP API, and paying by the 
lookup hit, rather than paying a flat monthly subscription fee to 
download the monthly csv data, import it, and make unlimited and faster 
local queries.

They also tell us which states (and other taxing entities) require that 
we collect tax on the shipping charges too, so we can -- and this has 
been the most fun part -- compute the taxable portion of shipping 
charges -- by *weight* no less, not price -- when some items in a single 
order come from a locality that taxes shipping and others do not :-)

> Then comes reporting -[snip truly scary stuff]

Oh good grief!  Thank goodness we've not been asked to do this -- er, at 
least yet!

> Too much melodrama? Opinions? Mistakes?

Then there's this:

Amazon Becomes a Proponent of Uniform Internet Sales Tax

Not sure if a standardized national sales tax law is a *good* thing or 
not, but at least some regulated simplification would be welcome.  And 
certainly less ...unreasonable.


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