Ask HN: Sales tax for a SaaS side-hustle

1 point Feb 25, 2021

Hi HackerNews - I am going to start my first SaaS side-hustle. Any tips on when should I start worrying/collecting about sales tax. I haven't yet launched and not sure when will I make my first sale.

Any tips from your experience when you started?

Edit: Based in California, USA. All infrastructure located in California as well.

billconan Feb 25, 2021

We currently use stripe + taxjar, but it's too complex to handle for a side-hustle in my opinion.

I have heard of https://paddle.com/ , which is a payment service + tax handling. Basically it's like apple's app store. You sell your creation to paddle, and they resell it. So they will handle taxing and you get royalty. it's way easier.

I have never tried them, but if I were to create a side-hustle, I will consider paddle.

aravya OP Feb 25, 2021

Thanks for the advice, been looking at Paddle/FastSpring. If I may ask, did you start with tax collection on day one?

billconan Feb 25, 2021

ya, the tax is calculated using taxjar's api on day one and it's reflected on the checkout page. (https://www.taxjar.com/sales-tax-calculator/). But I'm unsure about tax filing, because I don't know about our accounting. (We are a startup).

If this is for my own side-hustle, I wouldn't want to deal with it. It's super complex. Each city has a different tax rate, and you need to file taxes to different states. Each state has a tax free allowance.

aravya OP Feb 25, 2021

Got it, this helps. Been leaning towards Paddle/FastSpring etc.

billconan Feb 25, 2021

BTW, I have never heard of FastSpring, is it the same as Paddle?

aravya OP Feb 25, 2021

From the docs, both seem to be equivalent offerings, yet to dig to depth.

ayoubElk Feb 25, 2021

I think this largely depends on where you're based, you should provide more information to get advice specific to your situation.

aravya OP Feb 25, 2021

I am based in California, US.

pletsch Feb 25, 2021

This really depends on where you're located. Who are you using as a payment processor?

aravya OP Feb 25, 2021

I am based in California, US. I will either use Stripe for payments, if sales tax is not a concern at this point. Else, I would like to go via a reseller like Paddle to help with tax collection/deposit etc.

pletsch Feb 25, 2021

I'm not in California and I know a lot of people on HN are, so I'll refrain from giving further advice. If you don't find your answer, I'm sure an hour of an accountants time could help tremendously.

aravya OP Feb 25, 2021

Surely. I am trying to get much information before my upcoming meeting with a CPA so as to be ready with all my questions.

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