Ask HN: Costs for US sales tax compliance for a two-sided marketplace

I'm consulting for a US-only startup that has approximately 2000 sellers. We don't yet facilitate payments on site because we are worried about not being sales tax compliant. But now we're thinking about biting the bullet.

Assuming we sell into all states and that our transaction volume will reach $10 million USD, what would be the cost of calculating, collecting, and remitting sales tax to the relevant states, counties, and cities?

Assume too that we only sell one type of product (i.e. we are a specialist marketplace not a general one).

It might be worth separating into setup and recurring costs.

Any surprises in store? Or recommendations in terms of tooling or vendors?

4 points | by throway-9998888 1 day ago

3 comments

  • gethly 3 hours ago
    Don't. By that I mean, do not get involved in the tax burden yourself. Let the sellers, which are businesses, manage their own taxes. This is what I am doing with my own project. Amazon and few others have taken up on themselves to make life of their sellers easier by handling taxes for them, especially for EU, but i see no reason for it whatsoever.

    Businesses should be businesses and handle their own taxes and legal obligations by themselves.

    Additionally, if you get involved in between the seller and the buyer, YOU are now liable when it comes to taxes, as you become de-facto the seller, you have to handle returns/refunds(including the tax aspect and have to handle already paid taxes in such cases as well), audits and other legal aspects. There is simply no good reason why you should involve yourself in this whatsoever. Just facilitate the business transaction, but not the financial transaction.

    [-]
  • mtmail 1 day ago
    Related "Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?" https://news.ycombinator.com/item?id=43298663