This is almost certainly an issue for a separate module, but I'll bring it up here to get this started.

The U.S. Senate just passed a bill to require merchants with more than $1,000,000 of out-of-state sales to collect sales tax from all customers and send the revenue to the appropriate states. It requires the states to provide some measure of support ("software") to do the calculation. It is unlikely to pass the U.S. House of Representatives, but it could happen. If it doesn't happen this time, it will certainly happen in the next few years.

Note: Consumers are already required to pay tax on out-of-state purchases (called a "use tax"), but there is no enforcement of this.

Note: Five states don't have a sales tax.

Brick-and-mortar stores are pushing for this, as they feel that out-of-state online retailers have an unfair pricing advantage when customers don't pay tax. The states themselves are pushing for this, as they need the money.

Regardless of the virtues of the act, it's a potential nightmare for small online retailers, such as those who use Ubercart. We don't have the ability to track zillions of tax rates. We don't have the resources to fill out the paperwork (and send a check) for every jurisdiction.

This gets especially messy, because different counties/cities in the same state can have different rates. Also, different items are taxable in different states.

Ubercart, or an additional module, could get the following features that would help:

  • Tax module that would fetch up-to-date tax rates from some central repository. Googling for "state sales tax API" provides some examples. TaxCloud seems promising and they have an Ubercart module, but they only cover 24 states and are not putting their module on drupal.org.
  • Reporting on sales tax paid by customers, by state (this might already exist).
  • Assistance in dealing with the filing and paperwork. Electronic filing and payment would be great!
  • Detailed documentation on how all this works.
  • E-commerce independence. I.e., make a generic Drupal module to do this, then make adapter modules to work with Ubercart, Drupal Commerce, and any other sales-based module that needs it.

I wouldn't expect all of that at first, but these are some issues to consider....

Comments

Taxcloud’s picture

Taxcloud commented

TaxCloud is indeed free for retailers - we are paid by the states.

To clarify two points:

1. We handle sales tax for every address in the US - but we can only actually file returns on behalf of merchants in 24 states today. We expect this number to quickly include all states with sales tax (46) once the pending federal legislation passes (reference http://marketplacefairness.org). Regardless of our ability to file in some states, we do capture all transactions and prepare merchant-usable forms for merchant self-reporting in the remaining states that have not signed up for TaxCloud service yet.

2. We have NO aversion to publishing our module on drupal.org

If you have any questions, our phone number is at the top-right of every page on our site (https://taxcloud.net), and we look forward to the opportunity to answer your questions and earn your trust.

Thank you for mentioning us in your review of the situation!

-David

tr’s picture

tr commented
Status: Active » Closed (won't fix)

There are a number of commercial tax calculation services that have Ubercart modules - TaxCloud is not the only choice. Some of these services have been heavily promoted on ubercart.org.

Likewise, some states already have free web services for tax calculation. Many don't, however, and if you live in one of those states I think it would be great if you could contact your state's department of revenue and advocate for making tax information available via a web service. That strategy worked here in Washington when we first switched to a destination-based sales tax. However, it took about a year of trying before we got the web service...

Ubercart does have a way to hook in external tax calculations, so I don't see anything further that needs to be done to enable these commercial services. I don't think modules for commercial services are something we should provide as part of core Ubercart.

DanZ’s picture

DanZ commented

Taxcloud wrote:

We have NO aversion to publishing our module on drupal.org

I strongly recommend that you do this. Drupal.org provides some critical services, including update notifications, issue queues, visibility, version control, quality control, and assorted automation. All Drupal modules intended to be public should be published here.

TR wrote:

Some of these services have been heavily promoted on ubercart.org.
...
I don't think modules for commercial services are something we should provide as part of core Ubercart.

I haven't seen these promotions. It might be nice to have a list of the services, as this will certainly become a major issue some day.

donnen’s picture

donnen commented

FYI, the TaxCloud Ubercart module is available here: http://www.ubercart.org/project/TaxCloud and it will also be added here. Thanks.