hostgator, nexus, and taxes

davidjames42973

14 years ago

Interesting article. Thanks for posting this.

Sent you a PM to ask you a couple questions...

Thanks

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Rob Howard

14 years ago

For real?

I now have to set up and register for sales tax in the state, county, cities, and other places?

But only for texas residents???

So this means I have to develop a solution or find a solution that will presort the buyers, add sales tax on their purchase, then file more paperwork and send money to Texas...

You know, I really sometimes believe government really enjoys hindering business.

FU%% that. Looks like I may be looking for a new host.

Anyone know of a host that doesn't call Texas home?

Thanks
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RemingtonSteele

14 years ago

Originally Posted by ccmusicman

Anyone know of a host that doesn't call Texas home?

There are tons of them. I have a VPS from ServInt. If you go with them, you get a choice of datacenters -- Los Angeles or D.C.

Thanks
2 replies

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Rob Howard 14 years ago

Originally Posted by RemingtonSteele

There are tons of them. I have a VPS from ServInt. If you go with them, you get a choice of datacenters -- Los Angeles or D.C.

Thanks, I'll be looking into all my choices.

Rob
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TelZilla

14 years ago

Originally Posted by RemingtonSteele

There are tons of them. I have a VPS from ServInt. If you go with them, you get a choice of datacenters -- Los Angeles or D.C.

I can definitely endorse ServInt. Their staff and owner was very helpful a few years ago when I got my first VPS.

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Joe Mobley

14 years ago

A little bit of an overreaction here.

I have used Hostgator for a couple of years now. They are located in Houston and Austin Texas. I am in the Fort Worth area.

That simply means that they, Hostgator, now collects sales tax on my hosting bill. The 8.something percent increase is not enough for me to leave a rock-solid vendor to my business.

You have to weigh the cost-benefit factor for your individual situations. But for me, adding sales tax is not enough for me to move my hosting.

I just saying.

Joe

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Kay King

14 years ago

I agree - you pay sales taxes on everything else - I'm not leaving the best hosting I've used just to avoid a very small amount of tax.

I remember Kindsvater (an attorney) posting not to worry about this - and that's what I'm going to do....not worry.

kay

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Rob Howard

14 years ago

Originally Posted by Kay King

I agree - you pay sales taxes on everything else - I'm not leaving the best hosting I've used just to avoid a very small amount of tax.

I remember Kindsvater (an attorney) posting not to worry about this - and that's what I'm going to do....not worry.

kay

I don't have a problem PAYING sales tax myself - I have a problem needing to COLLECT sales tax on people who purchase from Texas.

That is what I think the big fuss is.

Rob

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1 reply

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Joe Mobley

14 years ago

Originally Posted by ccmusicman

I don't have a problem PAYING sales tax myself - I have a problem needing to COLLECT sales tax on people who purchase from Texas.

That is what I think the big fuss is.

Rob

That's a good point, Rob. All of my clients that receive my real estate reports are in Dallas and Fort Worth.

Crap... I guess I need to check on that.

Joe

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TelZilla

14 years ago

Originally Posted by DigitalJoe

A little bit of an overreaction here.

I have used Hostgator for a couple of years now. They are located in Houston and Austin Texas. I am in the Fort Worth area.

That simply means that they, Hostgator, now collects sales tax on my hosting bill. The 8.something percent increase is not enough for me to leave a rock-solid vendor to my business.

You have to weigh the cost-benefit factor for your individual situations. But for me, adding sales tax is not enough for me to move my hosting.

The actual article states that merchants who host their sites in Texas, become a nexus, which basically means they need to register with the state and collect sales taxes. That is what the fuss is all about.

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Marc Rodill 14 years ago

Originally Posted by ccmusicman

For real?

You know, I really sometimes believe government really enjoys hindering business.

Yes.

And their silly "protect society from everything" regulations really hinder brick-and-mortar service businesses who have a hard time acquiring new customers locally.

The only reason a friend of mine is still IN business (new fees created of thin air every six months, and the mindless shuffling of paperwork and regulation aside) is because he can walk out the door and come back with 5 contracts at the end of the day.

Boy can SELL.

But mess up once and a "healthy" discriminatory fine can ruin you and put you under overnight.

It's pretty stupid. Admittedly.
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TelZilla

14 years ago

I think it would be incredibly difficult for them to enforce. Not to mention that a lot of Texas based hosts would lose business. After all, it's not all that difficult to get hosting in a Chicago based datacenter.

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I.M.Retired

14 years ago

So - 'All My Nexus are in Texas?' right?

I feel a song coming on...

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GarrieWilson

14 years ago

Reason number 395 to use ClickBank to sell your products.

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Rob Howard

14 years ago

Originally Posted by GarrieWilson

Reason number 395 to use ClickBank to sell your products.

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Well that's awesome - if you don't sell physical products.

Or don't want to do 1 click upsells.

Or don't want to do 100% commissions programs.

Or don't want to do free + shipping trials.

Or if you want complete control over your business.

Or if you want to make more money (less fee's)

Besides, I'm not entirely sure that would skirt the law. If your site is hosted in Texas, and you sell something, you are liable. Yes, clickbank counts as the wholesaler, and you sell it to them at wholesale and then they pay you your cut...

Rob

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snapcontent

14 years ago

Originally Posted by ccmusicman

Well that's awesome - if you don't sell physical products.

Or don't want to do 1 click upsells.

Or don't want to do 100% commissions programs.

Or don't want to do free + shipping trials.

Or if you want complete control over your business.

Or if you want to make more money (less fee's)

Besides, I'm not entirely sure that would skirt the law. If your site is hosted in Texas, and you sell something, you are liable. Yes, clickbank counts as the wholesaler, and you sell it to them at wholesale and then they pay you your cut...

Rob

Why do I get the feeling you aren't a Clickbank fan?

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GarrieWilson

14 years ago

Originally Posted by ccmusicman

Well that's awesome - if you don't sell physical products.

Or don't want to do 1 click upsells.

Or don't want to do 100% commissions programs.

Or don't want to do free + shipping trials.

Or if you want complete control over your business.

Or if you want to make more money (less fee's)

Besides, I'm not entirely sure that would skirt the law. If your site is hosted in Texas, and you sell something, you are liable. Yes, clickbank counts as the wholesaler, and you sell it to them at wholesale and then they pay you your cut...

Rob

Clickbank does a lot of that now. You could also use 2checkout. 100% commission, you could have your sales use CB so you still dont have to collect TX sales tax.

It wouldnt be skirting the law because CB is the seller/retailer. Not you.

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Rob Howard

14 years ago

Originally Posted by GarrieWilson

Clickbank does a lot of that now. You could also use 2checkout. 100% commission, you could have your sales use CB so you still dont have to collect TX sales tax.

It wouldnt be skirting the law because CB is the seller/retailer. Not you.

Oh I don't use 2CO, i use an actual merchant account with nanacast. It does everything for me and my fee's are a lot lower.

Other than that, I use paypal and RAP when needed.

Regardless, I don't want to hand over control to clickbank - i would rather just not sell to the state of texas then hand over to clickbank. Yes, I hate them that much.

Rob

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1 reply

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fyl 14 years ago

OK..Diane Kennedy posted this on her blog this morning (in the comments):

"We just learned from the Texas Comptroller that they have been innundated with inquiries and are in the process of rewriting the above referenced cite, reversing their position.

Bottomline.... a server in TX will NOT create nexus.

I think we need to all say a thank you to ecommercetimes.com who first broke the story. Without this nationwide publicity, TX could have snuck a bad tax in on a lot of unsuspecting people."

Let's see if Texas follows through...

Diane Kennedy’s USATaxAid » All My Nexus Live in Texas
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eAvenue

14 years ago

glad my host is not in Texas

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Joe Mobley 14 years ago

Originally Posted by eAvenue

glad my host is not in Texas

Living in Ontario, you would not have to pay Texas sales tax even if your host was in Texas.

Joe
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eAvenue

14 years ago

Thanks for the info Joe.

I was in Texas when I was stationed at Fort Hood. Nice place and not state income tax while I was stationed there.

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CDarklock

14 years ago

I don't collect my customers' addresses and locations, because I don't need them and the storage of personally identifiable information carries regulatory burdens I also don't need.

So there's no way for me to know whether my customer is in a state where I have nexus, or not.

But since that customer is required by law to pay use tax on whatever he buys that has not charged sales tax, it's okay. He'll just report it on his taxes at the end of the year and pay the required taxes.

And if he doesn't, that's not my problem.

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Rashell 14 years ago

Wouldn't it be just as easy for hosts such as Hostgator to move their facilities/servers out of the state? If I were Hostgator & this created a loss of sales/business/hosting accounts that would be something I'd consider. It's not like a server is land-locked.

Is there a particular reason they host from TX that makes it superior over other states?

For that matter if it were going to make a big difference to your business why not consider running your own server?

Rashell
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snapcontent

14 years ago

Originally Posted by CDarklock

But since that customer is required by law to pay use tax on whatever he buys that has not charged sales tax, it's okay. He'll just report it on his taxes at the end of the year and pay the required taxes.

And if he doesn't, that's not my problem.

:-) Genius! THAT'S how the world works!

Thanks
1 reply

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kindsvater 14 years ago

There was another thread on this where I posted a link to the Texas law. I use HostGator and I'm not worried in the least about paying Texas sales tax. Some regulator in Texas can say the earth is flat and that doesn't make it flat. Nor does it create a nexus that federal law and the constitution reject.
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globalpro

14 years ago

I think Host Gator will have to work something out for this. They just made a very sizable investment in their move to Texas, new datacenter, headquarters, etc.

Might be hard for them to bail out.

Thanks,

John

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deannatroupe

14 years ago

I like hostgator and all, but I probably will have to find another host for when I start selling physical products. I might keep the digital stuff on hostgator and sell the physical products on the other host whenever I make up my mind what to do.

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Rashell 14 years ago

I think Host Gator will have to work something out for this. They just made a very sizable investment in their move to Texas, new datacenter, headquarters, etc.

Hmmm, well that's something. You'd figure they'd have known this was just sitting there ready to be passed. And they didn't mention anything about it in their newsletters, blog etc. (Just re-read the latest).

They did mention they'll be selling domain names soon. And the prices being significantly lower than goDaddy. Nice!!!

I might keep the digital stuff on hostgator

According to the article, digital downloads will be taxable. So you'll want to move both to avoid the whole process.

Rashell
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Joe Mobley

14 years ago

Deanna,

Since you are in Georgia, you would not have to pay sales tax to Hostgator. No increase to you.

Joe

Originally Posted by deannatroupe

I like hostgator and all, but I probably will have to find another host for when I start selling physical products. I might keep the digital stuff on hostgator and sell the physical products on the other host whenever I make up my mind what to do.

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mld_publishing

14 years ago

Great information. Thank you for posting. I'm happy that I was already set up to collect sales tax in Texas for my eBay business. Now, I'll have to factor it into a few of my other niches.

Appreciate the information.

Thanks

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Joseph Ratliff

14 years ago

Interesting...it's like equating a piece of data to a physical brick IMO? My website is in Texas because the data is stored there (it isn't, I'm not hosted with Hostgator, but...)?

Hmmm... or am I interpreting this wrong?

Thanks
1 reply

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CDarklock 14 years ago

Originally Posted by Joseph Ratliff

Interesting...it's like equating a piece of data to a physical brick IMO?

I think most people have this all wrong. I honestly believe that if you have a physical dedicated server, that counts as nexus.

Which doesn't help me, because that's what I've got. My server's in San Antonio, because there are no natural disasters there. Ever. It's the most stable place on the planet.

But now I'm looking for a close second... I mean, honestly, I can have my whole system packed up and shipped elsewhere in a couple days... all I have to do is shuffle the data onto some other account temporarily.
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hostgator, nexus, and taxes

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