HACKER Q&A
📣 jilles

How does your SaaS company handle charging sales tax?


Hello,

For my SaaS company, I charge my customers via Stripe, PayPal and some other payment platforms. Sales tax is different in every country, and in the US it is even different per state.

How does your SaaS company handle sales tax? Do you use the country and secondary (zip code or state) of the saved credit card or have some sort additional form? I can imagine a scenario where company A is based in California but uses a credit card from NY. In that case they should pay CA sales tax but if I were to use their credit card information, it would be NY sales tax.

This feels like a problem that has been solved by any international (or just US) SaaS company. Any tips would be greatly appreciated!

  👤 rococode Accepted Answer ✓
We've been looking at this recently as well and have been considering switching to Paddle. It seems to solve all of our sales tax issues (and other challenges like selling in India or the EU in general) in exchange for about double the fees, which in our case seems worth it. Would love to hear anyone's thoughts on Paddle specifically.

I've heard about Quaderno and Taxamo as well, they seem to go on top of Stripe and PayPal, but I haven't looked at them closely and have read that the additional cost ends up being similar.

👤 seanwilson
> Sales tax is different in every country, and in the US it is even different per state.

I use Paddle for https://www.checkbot.io/ and they handle all country specific tax for you. They take 5% + $0.50 per transaction which is relatively high but you need to weigh up your priorities.

Similarly, Fastspring and Gumroad are worth looking at.

👤 nicholas73
Anyone know why Stripe doesn't handle this?