Yes. This is silly. We should change it. (But it's largely an issue for online sales, not physical locations. The McDonalds in San Anselmo, barring The Big One, stays in San Anselmo.)
See also: American healthcare, college, etc. "Our setup is absurdly complex in bad ways" is not an argument for keeping that setup, it's an argument for making fixes.
Why is this silly? If you're selling something, sales tax (or in other parts of the world, VAT or GST) will be owed[1]. Different places will have different levels of commerce and budgetary requirements, and sales taxes are one of the ways they can fill their coffers. Allowing for local jurisdictions to set their own tax rates is part of the federal system of government; indeed in the U.S. it is arguable that a national sales tax rate a la Europe would be unconstitutional.
And why should we eliminate sales taxes, etc. for online sales? Isn't the whole point of software that it makes it trivial to handle multiple sales taxes?
[1] Sales tax, VAT, etc. are taxes on the buyer but are collected by the seller as a matter of administrative convenience. Use tax / reverse charge covers the situations where a non-local seller doesn't collect the tax, but compliance was so low in the first several decades of e-commerce that every government around the world decided to expand sales tax compliance for online sales to non-local sellers.
Because it's an immense amount of paperwork, compliance, legal risk, etc. all to avoid just setting a more reasonable state/federal level of taxation. The US has a deeply weird attitude towards any changes to taxation.
> And why should we eliminate sales taxes, etc. for online sales?
No one's proposing that. Online sales just introduce the issue of not knowing the tax jurisdiction that's applicable for a brand-new shopper.
just setting a more reasonable state/federal level of taxation.
We have reasonable levels of taxation right now. 0% federal rate, because the Constitution does not allow for a federal sales tax. States can set their own rates based on their own needs, just like every member of the EU can set its own rate. And counties and cities can tag-along with their state's sales tax.
This was complicated back in the day when it was all paper tables. Software makes it easy. Excel makes it easy, and the dedicated sales tax SaaS make it even easier.
At my last company, we handled hundreds of thousands of sales a day globally and my tax department spent less than four hours each month on sales tax/VAT compliance because we used Avalara to handle sales tax rate lookups and compliance. (The four hours were for filing the VAT returns in the two dozen countries we couldn't file through Avalara.) To put it in terms a programmer would understand: each month, my entire department spent less time on sales tax compliance than the average Typescript programmer spends on compiling.
Online sales just introduce the issue of not knowing the tax jurisdiction that's applicable for a brand-new shopper.
That has been an issue for decades, and people got along just fine in the days when they had to do it by hand.
"The federal government could theoretically levy a nationwide federal sales tax under Article I Section 8 of the U.S. Constitution, but Congress has declined to do so."
(And I'm advocating for a higher state/Federal income tax rate so we don't need sales tax rates to make up the budget gaps we fill with sales taxes today.)
> To put it in terms a programmer would understand: each month, my entire department spent less time on sales tax compliance than the average Typescript programmer spends on compiling.
Sure. Because you outsourced that work to a third-party. Who doesn't work for free. You pass that cost to your customers, yes?
Los Angeles County Measure H: 0.25%, 10-01-2017 to 03-31-2025
City of Orland Transactions and Use Tax: 0.50%, 04-01-2017 to 03-31-2025
Rio Dell City Transactions and Use Tax: 1.00%, 04-01-2015 to 12-31-2024
City of El Monte Transactions and Use Tax: 0.50%, 04-01-2009 to 03-31-2025
City of San Pablo Reduction Transactions and Use Tax: 0.25%, 10-01-2017 to 09-30-2022
Town of Truckee Trails Transactions and Use Tax: 0.25%, 10-01-2014 to 09-30-2024
City of La Habra Transactions and Use Tax: 0.50%, 04-01-2009 to 03-31-2025
City of Seal Beach Transactions and Use Tax: 1.00%, 04-01-2019 to 03-31-2025
City of Westminster Transactions and Use Tax: 1.00%, 04-01-2017 to 12-31-2022
City of Pismo Beach Transactions and Use Tax: 0.50%, 10-01-2008 to 03-31-2025
Pacific Grove City Transactions and Use Tax: 1.00%, 10-01-2008 to 09-30-2022
Town of San Anselmo Transactions and Use Tax: 0.50%, 04-01-2014 to 03-31-2023
City of Sausalito 2014 Transactions and Use Tax: 0.50%, 04-01-2015 to 03-31-2023
Mariposa County Healthcare Transactions and Use Tax: 0.50%, 04-01-2005 to 03-31-2025
Mendocino County Mental Health Treatment Act Tax: 0.50%, 04-01-2018 to 03-31-2023
Mendocino Library Special Transactions and Use Tax: 0.125%, 04-01-2012 to 03-31-2023
City of Atwater Public Safety Transactions and Use Tax: 0.50%, 07-01-2013 to 03-31-2023
City of Capitola Transactions and Use Tax: 0.25%, 04-01-2005 to 03-31-2025
City of Campbell Vital City Services Transactions and Use Tax: 0.25%, 04-01-2009 to 03-31-2025
City of Davis Transactions and Use Tax: 1.00%, 10-01-2014 to 03-31-2025
* https://www.cdtfa.ca.gov/formspubs/cdtfa105.pdf