Destination Sales Tax...Brilliant!

For all you ecommerce folks here in Washington you have to really give it up to our state government when it comes to finding new, ever creative, ways to make work harder.

As most of you are well aware earlier this year (July 1, 2008) WA State launched its new "Streamlined Sales Tax" bill, otherwise known as Destination Based Sales Tax. For an ecommerce company this is a huge pain and is anything but "streamlined". The bill targets ecommerce companies and requires you to record each transaction amount and tax collected for each "tax location" that you do business with in the state. So not only do you have to figure out how much tax to collect, you have to become the state's accountant by explaining exactly where the tax should go. It is being sold as a way (sometime in the future) to level the playing field with out-of-state companies selling into our state, and vice versa, as part of the Streamlined Sales and Use Tax Agreement (SSUTA) which, ironically, is aimed at reducing the administrative burden on retailers and is full of controversy.

The reason I bring this up now is because I never really thought of it as a big issue, and that we could get away with just adding specific zip code rates to a stores zip code rate table, for a while at least. But after actually seeing the paperwork involved with accurately reporting the tax and seeing that a zip code can have several different rates, we were prompted to create a new Washington State tax lookup tool for AspDotNetStorefront. The tool works beautifully and plays nicely with the database-based tax lookup that it already contains. For a simplified explanation, our tax lookup contacts the state's database through our own web service (and a couple other functions) and applies it directly to the current order based on your shipping information, it even works with multiple shipping addresses. In addition, we will be adding a reporting tool that will spit out the information you need for reporting your quarterly tax collection to the State. I figure it is something that could done for the other 21 states that are a part of SSUTA, so that may be our next move.

I don't know how many states will end up taking part in SSUTA, it is not a federal government mandate, so only participating states have to go through this. Either way I'm sure that we will be soon collecting sales tax for other states sometime in the future. In fact you can start doing so now, if you so choose, by yourself becoming part of SSUTA; it's 100% voluntary. The SSUTA setup is actually pretty sweet and allows you to automatically pay the state for which you are collecting tax. We'd be more than happy to write the tax lookup code for that.

I guess I shouldn't complain too much this is the kind of stuff that keeps us in business.