On 23-Jan-12 13:01, Adam H. Kerman wrote:
John Levine wrote:

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yeah, it's simpler. I have both a NY sales tax merchant account and a
Canadian GST account. The GST is much easier to deal with.

What's your experience with VAT?

So, you're a reseller, and you would find it simpler to pay the tax you're
not subject to and then get it rebated?

You apparently don't understand how a VAT works. Here's how reselling
widgets works under the sales tax system, assuming a rate of 10%:

1. Get a sales tax license
2. Set up a commercial account with a wholesaler, providing your sales
tax license information so they don't charge you sales tax.
3. Buy a widget for $8.00, not including sales tax.
4. Price the widget at $9.09.
5. Sell the widget for $10.00, including sales tax of $0.91.
6. Send the government $0.91.
7. Keep your profit of $1.09.

Here's how it works under the VAT system, with a rate* of 9.1%:

1. Buy a widget for $8.80, including VAT of $0.80.
2. Price and sell the widget at $10.00, including VAT of $0.91.
3. Subtract VAT paid of $0.80 from VAT collected of $0.91.
4. Send the government $0.11.
5. Keep your profit of $1.09.

How do you think the former system is simpler? At worst, it has the
same complexity.

(* Due to the different ways of applying the rate, to get the same
yields calculate V=S/(1+S) or S=V/(1-V).)

S

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