Imagine you were on a road trip in 2017 driving a big RV across the United States from coast to coast. You drove through 200 miles in a corner of Texas, got some gas and a meal there and didn’t think much of it.
Now, in 2024, you’re taking your car on a road trip again and again drive through a corner of the Lone Star State. As you cross the state line, you come upon a tool booth. You’re surprised at the $50 toll, but you recall some random news that states are starting to do this. You pull out your credit card to pay, and the attendant informs you that you owe and additional $1,000 for an unpaid toll when you were last here, 7 years ago.
You comment that you don’t recall it being a toll road back then, and he informs you that it is based on a law from 2008, so it was clearly in-place in 2017. Again, you say that you don’t recall seeing a sign or speeding through a tool booth. He then comments that they didn’t actually have the tool booth built back then. But he shows you a picture from 2017 of a 2-foot tall sign, far off the road that includes 4 paragraphs of the state statute and has an address to mail payment. The sign is partially obscured behind a tree.
You comment that it seems unreasonable to expect somebody from out of state, driving through at highway speeds to be able to read and obey this obscure sign. As you’ve driven around the country, even back in 2017, usually there is ample notice, a toll booth, as they have now, and a reasonably easy way to pay the toll.
The response is that the law is the law. Ignorance doesn’t mean you don’t have to obey it. You can’t proceed through the state. You can pay the toll now, or set up a payment plan. You have the option of turning around and backtracking 200 miles to go an alternate route, but now that they have your picture and know who you are, they may be able to just take the money from your bank account.
That’s a pretty accurate comparison to the State of Texas’s requirement to collect back taxes on Software as a Service from 2017. Only in the past couple years have software companies been aware that SaaS is now taxable in a few states. It would be extremely controversial to collect a toll, like in this example, yet thats a pretty close comparison to what businesses are having to do with Sales and Use Tax there now. It seems there is no leniency, despite their lack of any notice or general instruction, to somebody who they would not have reasonably expected would be aware of this requirement.
UPDATE: I’ve published some of the scripts used for complying with this at https://www.brandonchecketts.com/archives/sales-tax-from-stripe-transactions-report