Why tax law is worse than you think

We spend a lot of time reading tax rules so our customers don’t have to. Most of it is exactly as dull as you’d expect. Some of it is genuinely strange. Here are a few things that surprised even our own team.

The US has thousands of sales tax jurisdictions

There’s no federal sales tax in the US. Instead, states, counties, cities, and special districts can each set their own rates. Since the 2018 Wayfair ruling, you can owe sales tax in a state just by selling enough there — no office or employees required.

Software isn’t taxed the same way everywhere

Some US states tax SaaS, some don’t, and some tax it only partially or only for business customers. A few treat downloadable software differently from software accessed in a browser. The same subscription can be taxable in one state and exempt across the border.

Where your customer is can be hard to prove

Many countries require you to collect evidence of the customer’s location, and those pieces of evidence don’t always agree. A customer with a German billing address, a French IP address, and a Spanish bank card is a real and fairly common puzzle.

The rules keep changing

Rates change, thresholds move, and new countries start taxing digital services every year. Keeping up is a full-time job — which is exactly why we made it ours. If you’d rather be shipping than reading tax bulletins, that’s what we’re here for.