Ask HN: How to handle sales tax for SaaS side projects?
I asked this also on Reddit, and got this really nice answer:<p>Pasting it here hoping it will help others too<p><a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;SaaS&#x2F;comments&#x2F;brvxgc&#x2F;how_to_handle_sales_tax_for_saas_side_projects&#x2F;?utm_source=share&amp;utm_medium=ios_app" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;SaaS&#x2F;comments&#x2F;brvxgc&#x2F;how_to_handle_...</a><p>I ran into the same issue with my startup.<p>There are two options:<p>Use a service like TaxJar &#x2F; Avalara &#x2F; Quaderno to automatically calculate taxes.
Keep in mind that there are costs to getting a sales tax ID in certain countries &#x2F; states and that you&#x27;ll be losing valuable time by having to file returns (autofile isn&#x27;t supported everywhere).<p>Also, you&#x27;ll need to consider that they may not support every country that has a sales tax implication either.<p>Use a payment processor that acts as a reseller of your digital products (Paddle, 2Checkout, FastSpring)<p>Because they will act as the merchant of record for a transaction, they will be responsible for calculating and remitting sales taxes.<p>The disadvantage of this method is that there&#x27;s much higher fees. For instance, Stripe charges 2.9% + 30 cents per transaction, while Paddle charges 5% + $0.50.<p>Not having to worry about sales tax is well worth the added cost in my opinion.