Comment by wtvanhest | Hacker News Reader

Comment by wtvanhest | Hacker News Reader

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Its really just a software problem. The vast majority of products made in the US which you describe all have unique identification numbers called UPCs, Universal Product Codes. With the exception of in house made items like custom baked goods almost every product has a universal code. That code can easily be linked to a database which identifies its characteristics by state and county etc.

Once you have the characteristics by state/county/etc. (how the product is described legally), you can then cross reference it to where it is sold to and calculate a tax.

Is it a lot of data? Absolutely, but it is doable and the person/team who does it is sure to have a fairly large business charging companies who want their products sold online and companies using their system.

[ADDED] There will likely be multiple providers which should drive the price down and economic profits to zero. There is no reason why you would pick 1 tax calculator over another except price.

Most foods won't be an issue since they aren't sold as much online.

If you are a retailer of a new item with low volume, that is really where this is a problem. Once you make over a million a year in sales, you will likely have to hire an expensive consultant to figure out your tax implications.

[Additionally Added] I agree that it will be a challenging transition. But, in 10 years, this will be a non-issue.

I work with UPCs a lot. We're regularly disappointed with how FEW things have UPCs. There are whole categories — foods, apparel, etc. — without UPCs, and other segments - old books, beer, wine - where UPCs aren't actually used for unique products, but instead for things like brands or prices.

Add to this that state and local laws change frequently, and that they aren't machine-readable (and, even if the rules were easily accessible, the rules frequently would require a lawyer to parse, and might change based on where the goods are sold). It is a very thorny problem.

Amazon will be fine, yes.

I'm more worried about the small retailer that sells $1m in goods and pockets $150k, who now needs to buy expensive tax calculation software and pay taxes in 50 states.

As a developer at such a retailer, all I can say is: ugh. I hope this dies or is vastly simplified in the house.

It will likely come bundled with the credit card software they're already paying for.

It's already a common feature of retail PoS software, at least. Retailers with many physical stores have to make sure different Safeway or Barnes&Noble stores charge the proper sales-tax rates for each location, and getting that right is often outsourced to the software provider.

To that end it's also a data problem. Getting 100% accurate unique identifiers like UPC, MPN or ISBN for such items can be a challenge for online retailers. Also the notion of smaller retailers who fall under this legislation having to (pay someone to) modify their systems to support these third party services to calculate the collect tax is also kind of a bummer.

These issues are mostly resolvable with time and money. Regardless, the transition is going to be rough, in my view.

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