Is Stripe Going to Handle Sales Tax/VAT Compliance in the Future?
@csallen @PatrickC @patio11 - Stripe makes collecting payments so darn easy that many will just fire up a website, connect Stripe, and start accepting payments without realizing there is a huge world of tax regulations to think about.
I listened to the recent Product Hunt Radio episode and it really feels like Stripe is all about not only providing an awesome payment tool, but also helping small businesses start and operate efficiently.
That said -- is Stripe working on ways to handle sales tax and VAT as seamlessly as payments are handled? (if that's even possible).
Thanks!
I've been waiting for this too. It's a big reason I went with Paddle for subscription payments for https://www.checkbot.io/ so I can get on with selling and not have to worry about paperwork or risk not being compliant.
Exactly! Did you evaluate FastSpring before deciding to use Paddle? How has Paddle worked out for you?
FastSpring seems to have better documentation, a better API and more features but it's more expensive per transaction. Gumroad is another alternative, but isn't as flexible.
Paddle is working out OK. Their documentation and API are lacking to be honest but if it works exactly the way you need it's fine. Not having to even think about VAT or country related taxes is brilliant though. I don't understand people who say it's not a big deal to do it yourself.
I know! It’s so nice not having to even think about tax laws at all. But almost nothing in the WordPress world integrates with something like FastSpring.
Literally everything is essentially helping businesses not obey tax laws at all by directly integrating with Stripe.
The few companies that jump in the middle like TaxJar, Avalara, or Quaderno only calculate and collect taxes — leaving the business owner to remit them according the the various laws of the countries customers happen to come from.
Would love for something like Restrict Content Pro to support FastSpring as the payment provider. That would be perfect.
I know that Avalara does handle 'treasury' (paying tax liabilities) for US sales tax, so that is a fully automated solution. I thought TaxJar did as well. In other countries, paying the tax liability often has to be done by a registered agent because of laws. I think that with the EU's push towards open banking APIs, that there will be official government APIs for this in the future.
I was a product manager for a company that partners with Stripe and others to automate VAT and sales tax. IMHO, it will never be as easy as Stripe's core product because taxes are created by politicians and they are, well, dysfunctional. But there is a ton of work happening to make it easier.
Interesting. Can you elaborate on the work to make it easier? In what regards?
For VAT, automating registrations. Acting as a registered agent to file VAT returns.
For sales tax, an API you can call with the details of what's been sold, to who, when, and how it was delivered to get the tax rates back. Automated filing and payment of tax liabilities.
The company is Avalara. There's an integration for Stripe.
Do you think there will ever be a service that is affordable for startups pre-revenue but needs to set up their business to correctly take payments from the start?
Something that could empower a solo founder (a company of one) to remain tax compliant without stealing away a ton of productive time?
Yes, I do think that will happen. There are companies working on it, and provide good APIs and user interfaces, but they are single-market solutions. I don't think that rolling-up these solutions into a single company will solve the problem. Maybe we need to wait for the next generation of companies.
@Chaddeus in general, transactional tax automation systems are built to automate a company's tax policy. That's a wordy answer, but basically it means that each company can interpret tax laws and make changes to where, when, for what, and how they handle VAT and sales tax. But those are SMB / Enterprise needs. Most startups just need a templated set of policies for SaaS, Ecomm, Physical Products and maybe a few categories, and that works all over the world. The industry hasn't delivered this yet.
I'm also curious whether there's a service that integrates with Stripe to just handle VAT.
And by handle I assume you mean "does everything so I don't have to" right? :)