> That's when I stumbled on a platform called FastSpring, which acts as a merchant of record. They handle all international sales tax for you and have cool features to show prices in your customers currency, etc...
I don't know about international sales tax, but FastSpring does not handle domestic US sales tax correctly. I noticed this when I ordered an upgrade to BBEdit, and the tax came to 9.24% instead of the correct 9%. I contacted Bare Bones Software (makers of BBEdit) about it.
They referred me to FastSpring, who hosts their store. I contacted FastSpring, and their answer was:
> Thank you for contacting FastSpring. Due to the US Supreme Court ruling in South Dakota v. Wayfair, we have had the way we are required to collect state taxes changed. Right now, it is taken as an average across the state.
You are probably safe using them, even though they are not collecting sales tax correctly, because as you note they are the merchant of record.
When I passed FastSpring's answer back to Bare Bones, and suggested that they talk to their own lawyers to make sure that FastSpring indemnifies them from any liability for miss-collected tax, because everything I found when implementing post Wayfair sales tax handling said FastSpring is doing it wrong, they said that they too had asked FastSpring about this, found it strange, but that they and their corporate counsel believes that because FastSpring is the merchant of record that it will be FastSpring that is on the hook if there is any liability here.
This was last October, but I just checked and FastSpring is still doing it wrong. This does not fill me with confidence, because this is easy and cheap to get right for at least half the states (including mine). That's because of the Streamlined Sales Tax agreement [1]. The states that are a party to that have agreed that if online merchants collect sales taxes for sales in all of the member states, the states will cover the costs of using tax services like TaxCloud, Avalara, and a few others I don't recall to lookup rates and file all necessary reports and payments.
An interesting point about sales tax is that it isn't assessed by the state to collect from the customer, it's assessed against the company. The company can make up a shortfall from their own revenues (although overcharging the customer might be problematic).
I don't know about international sales tax, but FastSpring does not handle domestic US sales tax correctly. I noticed this when I ordered an upgrade to BBEdit, and the tax came to 9.24% instead of the correct 9%. I contacted Bare Bones Software (makers of BBEdit) about it.
They referred me to FastSpring, who hosts their store. I contacted FastSpring, and their answer was:
> Thank you for contacting FastSpring. Due to the US Supreme Court ruling in South Dakota v. Wayfair, we have had the way we are required to collect state taxes changed. Right now, it is taken as an average across the state.
You are probably safe using them, even though they are not collecting sales tax correctly, because as you note they are the merchant of record.
When I passed FastSpring's answer back to Bare Bones, and suggested that they talk to their own lawyers to make sure that FastSpring indemnifies them from any liability for miss-collected tax, because everything I found when implementing post Wayfair sales tax handling said FastSpring is doing it wrong, they said that they too had asked FastSpring about this, found it strange, but that they and their corporate counsel believes that because FastSpring is the merchant of record that it will be FastSpring that is on the hook if there is any liability here.
This was last October, but I just checked and FastSpring is still doing it wrong. This does not fill me with confidence, because this is easy and cheap to get right for at least half the states (including mine). That's because of the Streamlined Sales Tax agreement [1]. The states that are a party to that have agreed that if online merchants collect sales taxes for sales in all of the member states, the states will cover the costs of using tax services like TaxCloud, Avalara, and a few others I don't recall to lookup rates and file all necessary reports and payments.
[1] https://www.streamlinedsalestax.org/