Comment by mgkimsal | Hacker News Reader

Comment by mgkimsal | Hacker News Reader

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With so many local taxing jurisdiction, it's essentially impossible. I bought something from my office, and if it's shipped to my office, I pay one tax. Shipped to my home (in a neighboring county), it's a different (lower) tax.

I did some POS work for a company years back and tried to integrate 'taxes'. I was replacing an earlier system, and I used modern tax SaaS (avalara, IIRC). The client was telling me all my taxes were wrong, but... digging in... Avalara was correct, and the client had been calculating and collecting taxes wrong for... about 15 years. I had no way to try to figure out how they were doing it 'wrong' to match how they'd been doing it. This had to do with 'service/labor' income vs 'product' vs 'chemicals' they used. Different counties in the same state had different rates (which changed over different months/years historically). Tribal lands had different rules still.

The biggest lesson I took from that was... if you do something (tax calculations), do it consistently and uniformly. Should they have been audited, it may have looked a bit better that they were at least consistent in their tax issues, instead of looking like they were explicitly trying to somehow intentionally scam customers or the govt.

You could solve this in two ways:

1. Allow companies to advertise a price exclusive of tax (but inclusive of fees)

2. Require companies to list a single total price where the final price the customer pays is less than or equal to. So their advertised price would be inclusive of the highest tax rate the customer would be required to pay.

The oft-cited tax calculation "problem" is just an excuse.

An advertised price to a purchaser is one thing.

But the collection and remittance of the taxes to the specific taxing authorities is a whole other ballgame. Whether or not you see "$499 + $17 + $12 + $34" or you see "$571" on an item... the 'correct' amounts need to be identified, accounted for and sent to the specific taxing authorities. Doing that well enough, at scale, is not trivial, depending on where you're selling to, and how much.

> Allow companies to advertise a price exclusive of tax (but inclusive of fees)

But that's what they want -- to advertise the price exclusive of tax.

And some of the fees are the same thing. They depend on different factors and aren't necessarily fixed. You could say that fixed fees have to be included, but that's an obvious loophole; they'll make the fee $5 if you're in California and $4.99 otherwise. Or $5 normally and $0 if you meet some esoteric condition that hardly anybody does, if you require the minimum fee to be included.

> Require companies to list a single total price where the final price the customer pays is less than or equal to. So their advertised price would be inclusive of the highest tax rate the customer would be required to pay.

But then they can't advertise the lower price even if that's what many or most of their customers would actually be paying. Suppose San Francisco has a weird law that would add 300% to the price of the product but only for people who live there, and you're advertising across the entire state.

Also, then they bypass it by advertising a product which is only available to be shipped to addresses in states with no sales tax or expensive regulatory requirements. When you show up and ask for that product they say it isn't available to you but here's one that is which is really the same thing under a different SKU, for the same price exclusive of local taxes and fees.

I don't think that's true. India for example has a ton of different taxes and until a few years ago the differences between states and different products were significant. Yet that didn't make it impossible, because everyone was already used to it.

> India for example has a ton of different taxes and until a few years ago the differences between states and different products were significant

India has two, maybe three, levels of taxation: central, state and maybe local. In America, you may have dozens of overlapping cities, counties, water districts, school districts and high school districts before we get to municipal, state and federal.

My own experience in a few different states is that it's usually just township/city, then maybe county, then state to be concerned about, but... the what is often more confusing. Selling a chemical? That's a specific tax rate. Applying that chemical? Might be a different rate, and might only be applied to the labor.

The big one that tripped up the client was not charging/collecting tax on shipping. They weren't, but the tax engine said that they should be. I think the rules on that had changed sometimes perhaps 10-15 years earlier in the areas they served, but they never kept abreast of that change. This was already several years ago, so my recollection is a bit hazy now.

> With so many local taxing jurisdiction, it's essentially impossible.

You can't honestly believe that only the US has different tax rates depending on which state/city you are in?

Obviously it could be difficult but once the sale happens you need to know the final price. So if you can figure out when selling the good you can figure it out when advertising the good.

EDIT - (can't edit now).

"Impossible" to have one single price that is applicable to every single potential buyer in all cases.

Easiest example: if a computer is advertised as $2199 "including all taxes!" and a buyer who is tax exempt is buying... they wouldn't pay the $2199 advertised price (or... shouldn't).

>With so many local taxing jurisdiction, it's essentially impossible.

What is this nonsense?

Businesses advertise "Widget is $PRICE + applicable tax". When you go to an individual store you pay ($PRICE + applicable tax). On the receipt it can show a breakdown of what that is.

If that's hard to do on the backend for the business too fucking bad. Consumers should know exactly what they're going to be asked to pay upfront.

You're focusing just on consumer/retail/store sort of thinking. The problem is wider than that. Figuring out where someone placed an order is sometimes required, even if it will be delivered or provided somewhere else. Understanding the use case - you may be selling a service, but if the service is performed in different locales, the service may be taxed at different rates. Advertising a service for $399, but performed in different counties, will mean a different tax rate. Now... you can figure it out after the fact, and charge everyone a flat $399, and pay the different taxes yourself (so your revenue might $380, $370, $360, etc), or you add on variable tax based on where that service is done, so the purchaser is paying $399 + ($local tax rate).

Again, that's the business's problem.

Be transparent with the price, tell the consumer precisely what they're going to be paying upfront. If it's hard, too bad, figure it out or don't be in business. At least that's how it should be.

"Prices shown for delivery to Denmark, click here to change delivery location." (based on GeoIP lookup, or a previous purchase if I'm logged in/cookied.)

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