I think this article means well but the advice is dated and times are changing.
Sure nobody is going to kick down your door or send you a fine if your little business is doing 1K or revenue per year but if you start making 100K or 1M then things are going to be different.
Secondly, yes many companies haven't paid their sales taxes for years and nothing bad has happened to them but the governments around the world are not stupid. They can see that they are only getting a small % of what they should be getting so I am expecting that things are going to change pretty rapidly.
Why? Simple, most governments today are broke. Living on debt and saddling future generations with more and more debt each year. Do we really think that they are just going to sit back and relax and watch companies around the world not pay their fair share?
And by companies around the world, I don't mean Apple or Google, I am talking about the small companies, the Shopify stores, the little SaaS just starting out. Apple and Google can fight and delay and financial engineer their way out of this but the small mom and pop shops won't be.
Case and point Stripe just bought Lemon Squeezy. If the MOR model was not needed, if paying sales tax was optional as it was pointed out in this article, why would Stripe bother purchasing this company?
My take is that the days of being a cowboy selling stuff on the internet while "forgetting" to collect the sales tax that is owed are over or will be over soon.
Governments can see that internet companies are making a lot of cash and they want what is owed to them. Should they make it simpler to collect and remit the taxes? Absolutely. But lets call a spade a spade. If you are supposed to collect the sales tax and pay it, and you don't do it, then you are cheating, plain and simple.
We are always rightfully asking governments to tax the companies that offshore their profits like the FAANG companies do, so why should we encourage people to cheat then? Isn't that hypocritical?
> Most SaaS businesses today operate as their own merchant of record—Outseta included. We have our own Stripe account, and our customers purchase our products directly from us.
Is that technically correct?
I thought with Stripe, they are the merchant and you’re technically just a sub account to them.
Generally a business operating on stripe is its own merchant of record.
There exceptions though, for example a stripe account linked to a platform via stripe connect or platforms using direct charges where their customers are the merchant of record.
Secondly, yes many companies haven't paid their sales taxes for years and nothing bad has happened to them but the governments around the world are not stupid. They can see that they are only getting a small % of what they should be getting so I am expecting that things are going to change pretty rapidly.
Why? Simple, most governments today are broke. Living on debt and saddling future generations with more and more debt each year. Do we really think that they are just going to sit back and relax and watch companies around the world not pay their fair share?
And by companies around the world, I don't mean Apple or Google, I am talking about the small companies, the Shopify stores, the little SaaS just starting out. Apple and Google can fight and delay and financial engineer their way out of this but the small mom and pop shops won't be.
Case and point Stripe just bought Lemon Squeezy. If the MOR model was not needed, if paying sales tax was optional as it was pointed out in this article, why would Stripe bother purchasing this company?
My take is that the days of being a cowboy selling stuff on the internet while "forgetting" to collect the sales tax that is owed are over or will be over soon.
Governments can see that internet companies are making a lot of cash and they want what is owed to them. Should they make it simpler to collect and remit the taxes? Absolutely. But lets call a spade a spade. If you are supposed to collect the sales tax and pay it, and you don't do it, then you are cheating, plain and simple.
We are always rightfully asking governments to tax the companies that offshore their profits like the FAANG companies do, so why should we encourage people to cheat then? Isn't that hypocritical?