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Transcript section:
[00:00:00.240 --> 00:00:03.120] This podcast is hosted by Transistor.fm.
[00:00:18.640 --> 00:00:19.520] Hey, everyone.
[00:00:19.520 --> 00:00:20.960] Welcome to Build Your Sass.
[00:00:21.120 --> 00:00:24.800] This is the behind the scenes story of building a web app in 2023.
[00:00:24.800 --> 00:00:27.280] I'm John Buddha, a software engineer.
[00:00:27.280 --> 00:00:28.720] And I'm Justin Jackson.
[00:00:28.720 --> 00:00:32.560] So happy to be back with our first episode of 2023.
[00:00:32.560 --> 00:00:34.560] I do product and marketing.
[00:00:34.560 --> 00:00:40.800] And thanks for following along as we continue to build Transistor.fm.
[00:00:44.640 --> 00:00:46.480] It's been a while since we recorded.
[00:00:46.480 --> 00:00:53.440] Yeah, the last episode was three or four months ago, I think, with the whole team after our team retreat.
[00:00:53.440 --> 00:00:53.840] Yeah.
[00:00:53.840 --> 00:00:54.880] What are we going to do about this?
[00:00:54.880 --> 00:00:59.360] Are we going to, do we just need to say, you know what, we're going to jump back on the horse?
[00:00:59.360 --> 00:01:02.240] Or I'm always confused what to do with this show.
[00:01:02.240 --> 00:01:02.640] Yeah.
[00:01:02.640 --> 00:01:06.000] I think we should, yeah, I think we should try to do it at least twice a month.
[00:01:06.000 --> 00:01:06.480] Okay.
[00:01:06.480 --> 00:01:10.960] Listener, if you're still here with us, first of all, hey, thanks.
[00:01:11.520 --> 00:01:12.960] We're on Mastodon now.
[00:01:12.960 --> 00:01:15.120] You can reach out on Mastodon, say hi.
[00:01:15.440 --> 00:01:16.800] I'm still on Twitter.
[00:01:16.960 --> 00:01:18.560] You can still say hi there.
[00:01:18.880 --> 00:01:20.320] Are you still on Mastodon, John?
[00:01:21.920 --> 00:01:22.800] I poke around.
[00:01:22.800 --> 00:01:24.080] I haven't really used it much, but yeah.
[00:01:24.720 --> 00:01:25.120] Okay.
[00:01:25.120 --> 00:01:29.520] Well, go follow John Buddha on Mastodon while he's still on Provider for Republic.
[00:01:29.760 --> 00:01:34.800] I deleted all of my history and basically don't use it.
[00:01:35.360 --> 00:01:40.800] Before Elon shuts off the API, so you can't delete your tweets anymore.
[00:01:41.440 --> 00:01:42.960] That's probably a whole podcast, too.
[00:01:43.360 --> 00:01:44.320] It is.
[00:01:44.640 --> 00:01:54.480] I actually think, I mean, we could record more often because I think now that once we got on the pre-call, I was like, man, there's actually some stuff to talk about.
[00:01:54.480 --> 00:03:34.240] Plus, I think the nice thing about podcasting, which we've said from the beginning, is that it it forced you and i to get on a call together and i think it's just so easy especially at this stage for you and i to not touch base even though we should be touching base and we keep we keep saying that and we never do yeah i have other friends who run a company and they like they hop on a call i think once a week and just like do a walk and talk for like an hour we should do more walk and talks too i have it's it's gotta warm up here soon but sooner yeah i mean i'm walking every morning so i'm i'm i'm out um one thing that actually we did we did implement that i think has been good is we have this once a month meeting where we just go through our books but that's been a nice one because we end up talking about other stuff and even if it's just a 15 minute call to you know clean up our accounting do some admin work uh talk about sales tax which we're going to get into today uh yeah that's been good yeah so listener we're going to try and record more episodes we'll put it in the calendar as a repeating thing yeah we used to have one of those yeah we should just we should just do it we should just have it in there maybe we should record on tuesdays and then just release it the following tuesday that's kind of a nice yeah that could work uh i'm gonna be on the mixergy podcast tomorrow which will be kind of a big deal because that's one of the podcasts that got me into podcasting.
[00:03:34.240 --> 00:03:34.880] Oh, nice.
[00:03:35.120 --> 00:03:41.440] A really popular business show from a long time back, Andrew warner.
[00:03:41.440 --> 00:03:42.800] So that'll be kind of fun.
[00:03:42.800 --> 00:03:46.640] I'm waking up at, well, I have to do that one at 8:30 a.m.
[00:03:46.960 --> 00:03:47.840] How are you feeling?
[00:03:47.840 --> 00:03:48.800] How's work?
[00:03:49.440 --> 00:03:51.040] What's our new year's update?
[00:03:51.040 --> 00:03:51.520] I'm good.
[00:03:51.520 --> 00:03:52.560] Yeah, work's been good.
[00:03:52.560 --> 00:03:55.840] I think, you know, I think the year ended really well.
[00:03:56.400 --> 00:04:04.240] We definitely had a bit of a slowdown over the holidays, work-wise, and just holidays and everything.
[00:04:05.040 --> 00:04:05.600] Yeah.
[00:04:05.840 --> 00:04:06.560] It's been good.
[00:04:06.560 --> 00:04:12.640] I think it was hard for me to get back into the swing of things after the new year.
[00:04:13.520 --> 00:04:16.480] And then I got sick for like 10 days or something.
[00:04:16.480 --> 00:04:17.120] Oh, yeah.
[00:04:17.520 --> 00:04:20.560] Had a bad cold that was going around.
[00:04:22.080 --> 00:04:26.640] But yeah, it was like slow getting back into and like trying to get back into something.
[00:04:26.960 --> 00:04:30.960] We haven't really worked on any big features yet.
[00:04:30.960 --> 00:04:40.400] Like we've been finishing up some stuff that I, you know, we had started in the previous year, but yeah, it was like, it wasn't like I just wanted to jump back anything.
[00:04:40.400 --> 00:04:42.480] It was like kind of had to slowly ramp back up.
[00:04:42.480 --> 00:04:53.760] And Jason and I have been working on different things and he's been working on some like you know features that aren't necessarily front-facing that users will see your customers.
[00:04:55.040 --> 00:04:57.280] So it's, I mean, overall, I think it's been great.
[00:04:57.280 --> 00:04:59.040] I still love it, obviously.
[00:04:59.040 --> 00:04:59.520] Yeah.
[00:04:59.760 --> 00:05:01.280] Love working with the team and everyone.
[00:05:01.280 --> 00:05:08.960] And, but I think Jason and I want to try to tag team some more features after like we finish up what we're doing now.
[00:05:08.960 --> 00:05:12.400] And like, because we did a couple of those and they were definitely more fun.
[00:05:12.640 --> 00:05:14.880] We're working on the same thing, going back and forth.
[00:05:14.880 --> 00:05:30.600] And yeah, that energy you two have when you're both working on the same thing is there's something about that that honestly, I put this in my urine review, but I've been jealous of it when you guys really get going on something.
[00:05:30.760 --> 00:05:38.440] It's like, oh, that kind of that the fire burns hotter when you know you're both on the same thing.
[00:05:38.440 --> 00:05:46.920] And we haven't really made it a point to do that, and we haven't been necessarily great about planning and shaping a feature beforehand.
[00:05:46.920 --> 00:05:48.440] Yeah, it's been a while since we did.
[00:05:48.520 --> 00:05:53.160] I think it was like maybe the dynamic audio stuff that we did.
[00:05:53.160 --> 00:05:53.560] Yeah.
[00:05:53.640 --> 00:05:57.320] Was the last one we really worked on together at the same time?
[00:05:58.440 --> 00:06:00.440] But yeah, it'll be good to get back into that.
[00:06:00.440 --> 00:06:00.680] I think.
[00:06:00.840 --> 00:06:04.440] And right now you've been working on this new.
[00:06:04.440 --> 00:06:05.400] Can we talk about that?
[00:06:05.400 --> 00:06:06.360] This Patreon feature?
[00:06:06.840 --> 00:06:07.320] Yeah.
[00:06:07.880 --> 00:06:13.800] So we had this big, we want to add monetization to Transistor.
[00:06:13.800 --> 00:06:21.720] We just think we've noticed when podcasters are earning some revenue from their show, they're more likely to do it.
[00:06:21.720 --> 00:06:28.280] Even like you and I, the reason, one of the reasons I want to record this show is because there's still people supporting us on Patreon.
[00:06:28.280 --> 00:06:28.760] Right.
[00:06:28.760 --> 00:06:32.600] And it feels like, oh, we got to like do it for our fans.
[00:06:32.600 --> 00:06:40.200] You know, we got to do it for the people that love the show and have been kind of supporting it from the beginning.
[00:06:40.200 --> 00:06:44.760] So we wanted to give that same energy to other people.
[00:06:44.760 --> 00:06:54.040] And so we've got a really cool Patreon feature that allows you to integrate with Patreon more deeply, I guess, right?
[00:06:54.040 --> 00:07:01.880] Like we're going to pull, like automatically pull your supporters from Patreon into your transistor website.
[00:07:01.880 --> 00:07:05.960] They'll be listed there on your website automatically.
[00:07:05.960 --> 00:07:07.080] In your show notes.
[00:07:07.480 --> 00:07:08.760] In your show notes, yeah.
[00:07:08.480 --> 00:07:11.880] Yeah, yeah, and that I think that's a starting point for monetization.
[00:07:11.880 --> 00:07:22.880] Like, there's a lot of our customers who use Patreon, but there's no great way for them to have a list of supporters like we do every week, or every not every week, but every episode with who's still supporting the show.
[00:07:22.880 --> 00:07:24.960] And yeah, that'll be that should be out soon.
[00:07:24.960 --> 00:07:29.440] I mean, it's live on our Build Your Saus website now to test it out.
[00:07:29.440 --> 00:07:30.240] Yeah.
[00:07:30.800 --> 00:07:37.920] And there'll also be this little widget that allows people to set their goal for the month and with a call to action on there.
[00:07:37.920 --> 00:07:45.600] So we're going to be giving podcasters the tools to have more calls to action for people to support.
[00:07:45.600 --> 00:07:48.400] I have a little progress indicator.
[00:07:48.400 --> 00:07:50.240] I'm actually really excited about this one.
[00:07:50.240 --> 00:07:54.240] I think once we release this, it's going to give us a lot of energy.
[00:07:54.240 --> 00:07:54.640] Yeah.
[00:07:54.960 --> 00:07:56.560] And yeah, I'm feeling good.
[00:07:56.560 --> 00:08:04.880] Actually, I've been hired Josh Anderton as a contractor to do a bunch of work with me on the marketing site.
[00:08:05.520 --> 00:08:10.560] And I have found that really invigorating.
[00:08:10.560 --> 00:08:16.160] Like he just, I get him to just book a bunch of days with me on my calendar.
[00:08:16.160 --> 00:08:34.400] And because I found like I was just getting into this habit of just work was just kind of happening to me, you know, like I'd show up, go through all of our support messages, go through all my emails, go through Slack, then like, you know, pick off something, but the energy wasn't there.
[00:08:34.400 --> 00:08:41.920] And having to show up on a call and often Josh has been like working on shit, so he has stuff to show me.
[00:08:41.920 --> 00:08:42.400] Yeah.
[00:08:42.400 --> 00:08:48.480] And it's like so energizing to have somebody else there.
[00:08:48.800 --> 00:08:49.440] Yeah, it is.
[00:08:49.440 --> 00:08:52.640] That's how I felt before we hired Jason.
[00:08:52.640 --> 00:09:03.320] Like it was, you know, COVID and we were both just kind of working remotely and it was easy to just kind of not, some days just not do much at all.
[00:08:59.520 --> 00:09:03.640] Yeah.
[00:09:04.280 --> 00:09:08.760] Even though you might be sitting at your desk, right?
[00:09:08.760 --> 00:09:11.240] I was definitely in a bit of a slump.
[00:09:11.880 --> 00:09:15.640] So it's been nice to, like, we shipped so much.
[00:09:15.640 --> 00:09:23.080] I, just that feeling of momentum, you know, when you get on it, like, and sometimes again, you know, the holidays happen, you have to ramp back up.
[00:09:23.080 --> 00:09:30.040] And, but for me, it was nice because I, because Josh is a contractor, he's motivated to want to book sessions.
[00:09:30.040 --> 00:09:33.240] So he's like, yeah, sure, I'll book three days with you this week.
[00:09:33.240 --> 00:09:37.880] And it's like, oh, perfect, because I know those three days, I got to show up.
[00:09:38.200 --> 00:09:45.240] And then it's going to be energizing to be like, okay, like, what, what do I need to have ready for this?
[00:09:45.240 --> 00:09:47.000] What are we going to do next?
[00:09:47.000 --> 00:09:48.200] How are we thinking through this?
[00:09:48.200 --> 00:09:49.640] What problems need to be solved?
[00:09:49.640 --> 00:09:59.320] It's just, there is something, yeah, there's something about that that is energizing.
[00:09:59.640 --> 00:10:02.200] So, yeah, I've been enjoying that.
[00:10:02.200 --> 00:10:15.560] And there's problems that I'm working on now, like search engine optimization that I didn't think I'd like, but I'm really like enjoying solving this mystery of how to get us ranking higher.
[00:10:15.560 --> 00:10:24.120] And are we making changes that are actually affecting, you know, the site and our rank and all that stuff.
[00:10:24.520 --> 00:10:38.600] Dear listener, if you could do me a favor and just search on Google how to start a podcast and scroll down until you find transistor and then click on transistor, I would love that.
[00:10:38.600 --> 00:10:44.720] Because, yeah, we're just a small little company trying to compete, you know.
[00:10:45.040 --> 00:10:46.560] But it's fun.
[00:10:46.560 --> 00:10:52.080] We could talk about so one quick story before we get, I want to talk about sales tax compliance.
[00:10:52.080 --> 00:10:52.560] Actually, you know what?
[00:10:52.560 --> 00:10:54.400] Let's just get into it.
[00:10:54.720 --> 00:10:55.040] Okay.
[00:10:55.360 --> 00:10:57.440] Because it's a very exciting topic.
[00:10:57.440 --> 00:10:59.040] It's very exciting.
[00:10:59.040 --> 00:11:01.440] Very few people are talking about it.
[00:11:01.440 --> 00:11:16.240] And especially in the United States, I think our European counterparts have a very different point of view on this and a different sentiment about it and a different kind of even cultural history with VAT.
[00:11:16.240 --> 00:11:22.400] A lot of them don't like VAT or, you know, the other sales taxes they have in the UK.
[00:11:24.240 --> 00:11:26.400] But they've learned to live with it.
[00:11:26.400 --> 00:11:32.480] And it's culturally enshrined there as like, we just know we got to do this, we got to deal with it.
[00:11:32.800 --> 00:11:43.600] But in the US and Canada, sales tax on software as a service is still relatively a new concept.
[00:11:43.600 --> 00:11:44.080] Yeah.
[00:11:45.040 --> 00:11:56.320] So much so that when I tweeted about this back in October 2022 and said, fellow founders, what are you doing for sales tax registration, calculation, collection, and remittance globally?
[00:11:56.320 --> 00:11:58.640] Very few people responded.
[00:11:58.640 --> 00:12:05.120] And the people who do respond, there's kind of a few responses.
[00:12:05.120 --> 00:12:12.080] There's people in Europe who just have this kind of idea that, well, of course, you've got to, everybody collects sales tax.
[00:12:12.080 --> 00:12:22.240] And of course, you've got to remit sales tax to every region in the world, every province, state, country that wants you to collect sales tax for them.
[00:12:22.240 --> 00:12:24.240] You need to do that for them.
[00:12:24.240 --> 00:12:26.240] And this is just a part of life.
[00:12:26.240 --> 00:12:29.920] There's folks that use merchants of record like Paddle and Gummy.
[00:12:31.640 --> 00:12:47.480] And most folks, I think, are not doing much or have not done much and are not planning on doing much if they run a company in the U.S.
[00:12:47.480 --> 00:12:48.600] or Canada.
[00:12:48.600 --> 00:12:50.680] Would you agree with that assessment so far?
[00:12:50.680 --> 00:12:51.640] Yeah, I would agree with that.
[00:12:51.640 --> 00:12:59.800] I mean, it's even a thing when we started talking about this and we realized that, oh, maybe we have to start thinking about this and doing something about it.
[00:12:59.800 --> 00:13:06.200] Like, I was looking at some of our receipts for services we pay for, and it's like all over the board.
[00:13:06.200 --> 00:13:11.320] I mean, even like large corporations that we pay don't charge a sales tax, which makes no sense.
[00:13:11.320 --> 00:13:11.880] Yes.
[00:13:12.200 --> 00:13:13.080] At all.
[00:13:13.080 --> 00:13:16.520] And then smaller ones, some of them do, and then most of them don't.
[00:13:16.520 --> 00:13:18.920] Some of them have started to recently.
[00:13:18.920 --> 00:13:19.480] Yeah.
[00:13:20.040 --> 00:13:22.760] But like, yeah, it's weird stuff.
[00:13:22.840 --> 00:13:27.400] Like, some of the bigger corporations still don't, and you think they would have to.
[00:13:27.400 --> 00:13:30.520] So that raises the question of like, do we need to?
[00:13:30.520 --> 00:13:31.080] What?
[00:13:31.400 --> 00:13:33.640] Yeah, it's just, it's frustrating.
[00:13:33.640 --> 00:13:45.480] And even I was listening to the Basecamp podcast, and David and Jason were talking about how they just recently solved this problem.
[00:13:45.480 --> 00:13:49.400] And it was like, it cost them, I think they said $6 million or something.
[00:13:49.720 --> 00:13:54.600] Millions in back sales taxes they had to pay that they never collected because they just didn't.
[00:13:54.920 --> 00:13:57.720] Maybe I'll get Chris to play a little clip of that right here.
[00:13:57.720 --> 00:14:03.320] But also, should we have waited 20 years to get a proper head of finance in to run things?
[00:14:03.320 --> 00:14:05.800] Yeah, okay, maybe that was a little too far, right?
[00:14:05.800 --> 00:14:11.240] In fact, that's one of those examples where there's almost a sticker price you can put on that.
[00:14:11.560 --> 00:14:14.280] Several years back, maybe this is five years back or something.
[00:14:14.280 --> 00:14:32.400] We realized that we hadn't been doing the right things around sales tax and that there were actually all sorts of obligations we had in the individual states because we're a remote company and you end up creating this thing called Nexus if you have employees in different states.
[00:14:32.400 --> 00:14:36.880] A nexus being that the state has a right to essentially tax you.
[00:14:36.880 --> 00:14:42.560] Now there's even more rules around just doing enough business in a given state means that you are liable for sales tax.
[00:14:42.640 --> 00:14:46.080] We hadn't really followed up on that because we didn't have anyone to follow up on that.
[00:14:46.080 --> 00:14:48.320] We had no one minding that risk.
[00:14:48.320 --> 00:15:00.160] And we ended up spending several million dollars out of pocket to settle back taxes when we realized by ourselves before getting audited or anything, you know what, we haven't been running this right.
[00:15:00.160 --> 00:15:07.600] So if Base Camp is just realizing now that they need to do something here, and to their credit, they did.
[00:15:07.600 --> 00:15:11.200] It cost them a bunch of money and they solved it.
[00:15:11.520 --> 00:15:16.480] But the implementation in North America is all over the board.
[00:15:16.480 --> 00:15:23.360] I even had a, I reached out to a bunch of founders in the kind of back channels because I wasn't getting any responses publicly to this tweet.
[00:15:23.360 --> 00:15:26.720] So I'm like, okay, I got to figure out what are people doing.
[00:15:26.720 --> 00:15:34.000] And, you know, I had a founder of a very well-known, successful indie SAS who's doing a lot more revenue than us.
[00:15:34.000 --> 00:15:37.920] And he's saying, I'd rather do almost anything than think about this stuff.
[00:15:37.920 --> 00:15:41.120] I recommend you just violate tax law.
[00:15:42.400 --> 00:15:45.440] And here's the thing.
[00:15:45.440 --> 00:15:49.840] Again, I think European founders will look at North Americans and go, what are you talking about?
[00:15:49.840 --> 00:15:50.880] You just have to do this.
[00:15:50.880 --> 00:15:52.480] This is just part of life.
[00:15:52.480 --> 00:15:55.440] This is just part of running a business.
[00:15:55.440 --> 00:15:55.840] Right.
[00:15:56.160 --> 00:15:57.920] The government has a right to charge you.
[00:15:58.240 --> 00:16:05.160] No, that's the thing, but it hasn't been for a long time, especially with internet sales that cross borders.
[00:16:05.320 --> 00:16:09.560] It's just not, it hasn't really been a requirement until the last couple of years, even.
[00:16:09.560 --> 00:16:11.000] Yeah, I mean, in the U.S.
[00:16:11.000 --> 00:16:11.720] and Canada.
[00:16:11.720 --> 00:16:12.200] Right, right.
[00:16:12.280 --> 00:16:12.440] U.S.
[00:16:12.520 --> 00:16:15.000] and Canada's just started this.
[00:16:15.480 --> 00:16:35.480] And I mean, you can go back to our VAT, like, there's conversations on the web about VAT that when that came out, North American software companies, by and large, were saying, we are not going to collect and remit sales tax for foreign governments.
[00:16:35.480 --> 00:16:36.440] Why would we do that?
[00:16:36.440 --> 00:16:41.160] That's just culturally, that makes no sense here.
[00:16:41.480 --> 00:16:50.440] And even if we can just take a slight detour, I think the way people see these taxes is actually flawed.
[00:16:50.440 --> 00:16:55.320] A lot of people are like, well, you have, if the government is charging your business a tax, you have to pay it.
[00:16:55.320 --> 00:17:00.440] These sales taxes are not a charge on businesses.
[00:17:00.440 --> 00:17:03.880] These are attacks on customers.
[00:17:03.880 --> 00:17:16.280] So the government has outsourced, has externalized the calculation, collection, and remittance, and auditing and admin of sales tax.
[00:17:16.280 --> 00:17:20.600] They have outsourced that to businesses and small businesses.
[00:17:20.600 --> 00:17:27.160] It should be clear that this is not like an income tax that businesses are paying.
[00:17:27.160 --> 00:17:29.160] We've always paid our income taxes.
[00:17:29.160 --> 00:17:31.080] We pay our state taxes.
[00:17:31.080 --> 00:17:34.440] We pay our employee taxes.
[00:17:34.440 --> 00:17:39.240] Those are all taxes on employers and on businesses.
[00:17:39.240 --> 00:17:41.880] This is an externality.
[00:17:42.200 --> 00:17:52.400] The governments around the world have just said: the way we're going to collect these taxes is we're going to force businesses to do this for us.
[00:17:52.400 --> 00:17:55.120] And I think that's a mistake.
[00:17:55.120 --> 00:17:58.400] And there's a better, more efficient way to do it.
[00:17:58.400 --> 00:18:04.080] I think governments are missing out on so much sales tax revenue.
[00:18:04.080 --> 00:18:11.040] Even, like you said, if you look at the vendors, how many vendors are not doing this properly?
[00:18:11.040 --> 00:18:11.600] Right.
[00:18:12.080 --> 00:18:24.240] My guess is if, for example, all of these governments around the world, if they made the payment processors responsible, so they're still outsourcing it.
[00:18:24.240 --> 00:18:27.440] They're still outsourcing, externalizing the costs.
[00:18:27.440 --> 00:18:36.960] But if they're going to do that, make the payment processors the ones who are responsible for calculating, collecting, and remitting sales tax.
[00:18:36.960 --> 00:19:01.680] Then instead of having to go after whatever it is, millions of small businesses around the world that are e-commerce businesses and software businesses and software as a service businesses, instead of having to go after all of these companies that can sell internationally quite easily, just go after American Express, MasterCard, Visa, Paddle, Stripe.
[00:19:02.400 --> 00:19:07.200] That list is maybe 10 to 20 people, 10 to 20 companies.
[00:19:07.200 --> 00:19:20.800] Instead of going after millions, they would instantly, instantly, they would, my guess is they would double sales tax revenue from these kinds of businesses.
[00:19:20.800 --> 00:19:21.840] Yeah, I mean, it's kind of insane.
[00:19:22.360 --> 00:19:29.720] You know, you have some states, like I think Texas and Florida that don't have income tax and they rely on sales tax to supplement that.
[00:19:29.360 --> 00:19:35.080] Or I get maybe property tax, but and they're just missing out on tons of revenue for this stuff.
[00:19:35.560 --> 00:19:40.520] If you want to charge our customers sales tax, that's fine.
[00:19:40.520 --> 00:19:42.600] I'm not anti-sales tax.
[00:19:42.920 --> 00:19:45.560] Sales taxes are, what do you call those taxes?
[00:19:46.840 --> 00:19:53.320] They're consumption taxes, so they're generally pretty good because the more a customer spends, the more they have to pay in tax.
[00:19:53.320 --> 00:19:54.200] Makes sense, right?
[00:19:54.200 --> 00:19:57.720] The more money you have to spend, the more tax you can get.
[00:19:57.720 --> 00:20:00.040] I'm totally fine with that.
[00:20:00.040 --> 00:20:18.600] But I think once people understand the costs that small businesses like us have to take on on behalf of the governments so that we can do this work for them, I think they would be very surprised.
[00:20:18.600 --> 00:20:22.920] And the best example of this is: well, there's two good examples of this.
[00:20:22.920 --> 00:20:30.120] One, Paddle, which is about, oh, see, I don't want to get in trouble, but I think Paddle is what, 10% or something?
[00:20:30.600 --> 00:20:32.040] Let me go back up here.
[00:20:32.040 --> 00:20:37.160] Paddle is 5% plus 50 cents per transaction.
[00:20:37.800 --> 00:20:42.440] Stripe's base rate is 2.9% plus 30 cents per transaction.
[00:20:42.440 --> 00:20:49.160] And Stripe will often give you a volume discount once you hit a certain threshold.
[00:20:49.160 --> 00:20:52.920] Like we pay less than that to Stripe.
[00:20:52.920 --> 00:21:01.000] So if we were going to switch to a merchant of record like Paddle, we would be paying a lot more in transaction fees.
[00:21:01.000 --> 00:21:06.920] And the only reason we're doing that, by the way, is not because Paddle has better features or whatever.
[00:21:06.920 --> 00:21:14.040] Like, that would be an incredibly costly exercise for us to rip out Stripe and then put Paddle in.
[00:21:14.040 --> 00:21:24.160] The only reason we would do that is so that the government, the governments, can collect their sales tax revenue that has nothing to do with us.
[00:21:24.160 --> 00:21:24.560] Right.
[00:21:24.560 --> 00:21:25.200] It's weird.
[00:21:25.200 --> 00:21:34.640] All this time and money we've already spent trying to do this stuff is like you're just paying for the privilege to collect money that you never see anyway.
[00:21:34.880 --> 00:21:35.760] Who's privilege?
[00:21:35.760 --> 00:21:37.440] Like, yeah, I know it's not a privilege.
[00:21:37.600 --> 00:21:39.360] I mean, I say that sarcastically.
[00:21:40.560 --> 00:21:41.200] You know what?
[00:21:41.200 --> 00:21:48.720] It would even be different if instead these international governments said, hey, you know what?
[00:21:48.720 --> 00:21:55.920] We're actually going to charge you an income tax based on the revenue you earn in our country.
[00:21:55.920 --> 00:22:08.240] That would be easier and cheaper for us because then we just say, okay, well, Lithuania, every sale we make in Lithuania, we have to send them 5% because that's their income tax.
[00:22:08.240 --> 00:22:10.240] And then we could decide if we want to do that.
[00:22:10.240 --> 00:22:15.680] But that is way easier to just say, how much money did we collect in Lithuania?
[00:22:15.680 --> 00:22:17.120] Okay, it's $100.
[00:22:17.120 --> 00:22:20.400] Okay, we'll send them $5, whatever.
[00:22:20.400 --> 00:22:24.560] And, you know, especially if there was a good API for it, fine.
[00:22:24.880 --> 00:22:56.320] The difference is these governments want us to track every single customer, every single transaction on their behalf, keep records, register individually in every single state, province, and country around the world, remit quarterly, often manually by logging into their bullshit website, paying accounting firms and tax compliance firms massive amounts of money to do these things.
[00:22:56.320 --> 00:23:03.240] And the record keeping that we have to do on top of this, like we have to track every charity and tax exempt.
[00:23:03.240 --> 00:23:12.760] Like this charity, this church is tax exempt in Illinois, but it's not tax exempt, but churches, you know, aren't tax exempt in Lithuania.
[00:23:12.760 --> 00:23:14.040] Like we got to track all that shit.
[00:23:14.280 --> 00:23:19.720] And we have to track their tax exempt documentation and keep it updated like every year.
[00:23:19.720 --> 00:23:21.080] And keep it updated.
[00:23:21.080 --> 00:23:22.520] And we have, we're a team of four people.
[00:23:22.520 --> 00:23:25.560] We're not like, who's going to do this?
[00:23:25.880 --> 00:23:29.480] This is honestly crazy making.
[00:23:30.040 --> 00:23:36.360] The whole endeavor, and I'm surprised more SaaS companies aren't talking about it.
[00:23:36.360 --> 00:23:39.080] Now, let's look at the risk side of this.
[00:23:39.320 --> 00:23:47.960] The whole reason you and I even got into this is because I was doing some stuff on my side, transferring my share ownership and doing some other things.
[00:23:47.960 --> 00:23:52.760] And I had to employ a tax accountant at a big firm.
[00:23:52.760 --> 00:23:54.680] And they were just asking questions.
[00:23:54.680 --> 00:23:57.000] And I said, they asked about sales tax.
[00:23:57.000 --> 00:24:00.520] And I said, well, we're, you know, most of the states haven't started doing this yet.
[00:24:00.520 --> 00:24:02.840] And he's like, well, actually, the states have started.
[00:24:02.840 --> 00:24:04.040] They've figured it out.
[00:24:04.040 --> 00:24:06.440] They're starting to charge sales tax now.
[00:24:06.760 --> 00:24:13.560] I'm like, okay, but okay, well, maybe we can try doing a few things, but we're never going to, you know, remit VAT.
[00:24:13.560 --> 00:24:14.840] That's insane.
[00:24:14.840 --> 00:24:22.520] And he goes, well, you might want to think about it because the risk is fines, number one.
[00:24:22.520 --> 00:24:31.800] And two, if you ever get acquired, a lot of deals fall through if these kinds of liabilities have not been figured out.
[00:24:32.360 --> 00:24:35.160] So that was the initial motivation.
[00:24:35.480 --> 00:24:41.000] And in my head, when I talked to you about this, I was like, well, Stripe has Stripe tax.
[00:24:41.320 --> 00:24:44.680] Surely this has been automated by now.
[00:24:44.680 --> 00:24:44.840] Right.
[00:24:45.200 --> 00:24:46.800] And so, yeah, we looked into it.
[00:24:46.800 --> 00:24:49.200] And yeah, they have Stripe tax.
[00:24:49.200 --> 00:24:52.320] You can turn it on and start collecting sales tax pretty easily.
[00:24:52.320 --> 00:24:54.000] But you still have to remit it on your own.
[00:24:54.000 --> 00:24:54.720] And register.
[00:24:54.880 --> 00:24:58.160] But Stripe also, Stripe also bought Tax Jar.
[00:24:58.160 --> 00:24:58.480] Yeah.
[00:24:58.480 --> 00:25:05.040] So we talked to them and they're like, oh, yeah, we don't automatically remit in anywhere but the U.S.
[00:25:05.360 --> 00:25:05.840] Yeah.
[00:25:06.080 --> 00:25:08.320] So we're like, oh, it doesn't really work.
[00:25:08.320 --> 00:25:09.360] That's not great.
[00:25:09.360 --> 00:25:12.720] Again, this is not a tax on businesses.
[00:25:12.720 --> 00:25:18.480] This is government saying businesses need to collect these taxes on their behalf.
[00:25:18.480 --> 00:25:23.920] And so we're like, just, can we just, is there an API or something that can just figure this shit out?
[00:25:23.920 --> 00:25:31.920] Like, we are a part of Stripe's climate program, carbon, you know, they invest in carbon projects.
[00:25:32.240 --> 00:25:33.680] That's all automated.
[00:25:33.680 --> 00:25:35.600] It's just a percentage of our revenue.
[00:25:35.600 --> 00:25:36.720] They just take it away.
[00:25:36.720 --> 00:25:37.440] We don't see it.
[00:25:37.440 --> 00:25:40.560] We don't know where the, it's like, I mean, even if it was like...
[00:25:40.560 --> 00:25:41.920] There must be something like that.
[00:25:41.920 --> 00:25:44.000] Even if it was like something like the U.S.
[00:25:44.240 --> 00:25:48.480] government was like, all right, we now have a national sales tax on internet sales.
[00:25:48.480 --> 00:25:49.760] It's 5%.
[00:25:50.160 --> 00:25:58.960] And then you send us the money and you send us information on how much money you collected in each like state and we'll just pay it.
[00:25:59.040 --> 00:25:59.840] We'll do it.
[00:25:59.840 --> 00:26:01.760] You just send it once a month or whatever and we'll do it.
[00:26:01.760 --> 00:26:02.080] That's fine.
[00:26:02.160 --> 00:26:02.400] Yeah.
[00:26:02.560 --> 00:26:03.040] Great.
[00:26:03.040 --> 00:26:04.320] Sounds awesome.
[00:26:04.640 --> 00:26:11.920] By the way, even for like local coffee shops and stuff, I used to own a couple snowboard shops.
[00:26:11.920 --> 00:26:21.520] The number one reason small businesses get audited, I think, is sales tax because I have, well, I'll say it, I'll say it this way.
[00:26:21.520 --> 00:26:22.880] I don't know if that's that's correct.
[00:26:22.880 --> 00:26:29.520] Every friend I know whose business has been audited, it's been related to sales tax.
[00:26:29.520 --> 00:26:37.480] And the reason is, let's say, John, you and I start collecting sales tax on behalf of these governments.
[00:26:37.480 --> 00:26:40.760] Well, some of these sales taxes are 20%.
[00:26:41.080 --> 00:26:47.640] So, we're now going to have in our bank account all of this tax money that is actually not ours.
[00:26:47.640 --> 00:26:50.120] We've just collected it on behalf of the governments.
[00:26:50.120 --> 00:27:03.080] And then, on a schedule that's outlined by those governments, either quarterly or you know, biannually or every year or whatever, however, they want it, we then have to remit that to them.
[00:27:03.080 --> 00:27:07.640] Talk about a cash flow headache right there.
[00:27:07.640 --> 00:27:14.600] All of a sudden, we have to be managing how much of this is not our money, how much of this is the government's money.
[00:27:14.600 --> 00:27:18.600] Like, that is bonkers to me.
[00:27:19.240 --> 00:27:24.680] And it's not just like it's not like a flat tax, it's like in the UK, it's 20%.
[00:27:25.000 --> 00:27:38.680] Here's something even crazier: in the UK, if you sell to consumers as opposed to businesses, your prices need to be sales tax inclusive.
[00:27:39.000 --> 00:27:50.440] And so, when I've talked to sales tax compliance experts, their best practice for a business like us is for us to just eat the tax.
[00:27:50.440 --> 00:28:03.400] So, if you charge $100 a month to a customer, instead of showing that customer 20% on top, most businesses just keep their prices the same.
[00:28:03.400 --> 00:28:11.720] Like, our price for whoever it is in the world is $19 a month, $99 a month, but let's just say $100 a month.
[00:28:11.720 --> 00:28:13.880] That's been our price from the beginning, since we launched.
[00:28:13.880 --> 00:28:15.680] We don't want to increase it for people.
[00:28:16.000 --> 00:28:23.840] The advice is for us to just take 20% out of our revenue and send that to the British government.
[00:28:23.840 --> 00:28:25.680] Yeah, that seems crazy.
[00:28:25.680 --> 00:28:27.680] That's the best practice?
[00:28:27.680 --> 00:28:31.440] Founders in Europe, what are you doing?
[00:28:31.760 --> 00:28:33.120] Like, what are you doing?
[00:28:33.120 --> 00:28:41.280] You're giving away 20% of your margin to the government just because that's your money.
[00:28:41.280 --> 00:28:42.000] You know what I mean?
[00:28:42.000 --> 00:28:44.480] Like, this is not a tax on you as a business.
[00:28:44.480 --> 00:28:46.080] It's a tax on the customer.
[00:28:46.080 --> 00:28:46.240] Right.
[00:28:46.240 --> 00:28:50.800] And on top of that, they probably pay income tax if they're based in the UK, right?
[00:28:50.800 --> 00:28:51.280] Yeah.
[00:28:51.920 --> 00:28:52.480] Yeah.
[00:28:52.480 --> 00:29:01.520] And it's, it, it, I just, this whole thing is a train wreck.
[00:29:01.520 --> 00:29:04.000] And so we've tried a few things.
[00:29:04.000 --> 00:29:05.280] So, yeah, when do we?
[00:29:05.360 --> 00:29:07.760] We've been talking to this for a while, I think.
[00:29:07.760 --> 00:29:14.160] Since since the middle or early spring of 2022, we started talking about this.
[00:29:14.160 --> 00:29:17.120] Yeah, I was like, I started getting concerned about it.
[00:29:17.120 --> 00:29:19.120] I talked to you about it.
[00:29:19.120 --> 00:29:24.320] And we were kind of like, okay, well, we want to do the right thing.
[00:29:24.320 --> 00:29:28.160] It's not like we don't want governments to be able to collect taxes.
[00:29:28.160 --> 00:29:30.160] Like, that's fine.
[00:29:30.160 --> 00:29:31.360] Collect your taxes.
[00:29:31.360 --> 00:29:34.400] So, and so, yeah, we looked into Stripe, like you said.
[00:29:34.400 --> 00:29:35.440] We looked into TaxJar.
[00:29:35.440 --> 00:29:37.760] We had calls with TaxJar.
[00:29:37.760 --> 00:29:43.280] Then we talked to, we thought, well, maybe we can just hire some accountants to do this on our behalf.
[00:29:43.280 --> 00:29:46.800] And so we had phone calls with an accounting firm.
[00:29:46.800 --> 00:29:53.760] And they said, well, in terms of automated payments and registration and all that, we don't do that.
[00:29:54.080 --> 00:30:00.680] We recommend you look at, you know, TaxJar or one of these sales tax compliance companies.
[00:29:59.840 --> 00:30:06.040] And they named another one that we'll not name because we're going to say bad things about them.
[00:30:07.320 --> 00:30:10.440] And we're like, okay, well, I guess we got to do some research.
[00:30:10.440 --> 00:30:13.000] So we did more research.
[00:30:13.000 --> 00:30:26.520] And it seemed like the only company that would do automated registration, collection, and remittance on our behalf as a small team of four people was this one company.
[00:30:27.160 --> 00:30:32.200] And so John, bless his heart, called them.
[00:30:32.200 --> 00:30:37.240] I mean, yeah, so I had a call with one of their reps for like an hour and a half.
[00:30:37.240 --> 00:30:39.880] This is before we even signed anything or signed up with them.
[00:30:39.880 --> 00:30:40.840] And it was honestly great.
[00:30:40.840 --> 00:30:42.120] Like it was reassuring.
[00:30:42.120 --> 00:30:43.560] I had a good call with this guy.
[00:30:43.560 --> 00:30:44.120] Yeah.
[00:30:44.120 --> 00:30:46.120] He explained everything that we had to do.
[00:30:46.120 --> 00:31:02.840] And like, you know, it's a lot of stuff, but I don't know if he was a salesperson, but you know, they make you feel good that they're going to be able to take care of all of it for you after you fill out a number of documents and provide like some revenue, you know, proof of revenue in certain places.
[00:31:02.840 --> 00:31:11.000] The promise was we came to them with all of this angst and worry.
[00:31:11.000 --> 00:31:15.320] And the response we got back was, yeah, we're going to take care of all that for you.
[00:31:15.320 --> 00:31:16.760] It's going to be easy.
[00:31:16.760 --> 00:31:21.400] It just, it takes, we onboard you, we do everything, we hold your hand.
[00:31:21.400 --> 00:31:26.280] I mean, I don't think we realized how much it was going to be because people kept saying, whoa, that company is expensive.
[00:31:26.280 --> 00:31:31.160] But we were like, it seemed cheaper than going with something like Paddle.
[00:31:31.160 --> 00:31:31.720] Yep.
[00:31:31.720 --> 00:31:36.200] And less time consuming eventually once everything's ironed out and working and all that.
[00:31:36.200 --> 00:31:40.840] So we did eventually we did eventually sign up in, I think, November.
[00:31:40.840 --> 00:31:41.480] Yes.
[00:31:41.480 --> 00:31:45.280] So we signed up and we're like, all right, all right, the ball's going to start rolling.
[00:31:45.600 --> 00:31:47.040] This will be good.
[00:31:44.520 --> 00:31:47.600] Yes.
[00:31:48.240 --> 00:31:52.800] Then, mysteriously, well, a few things happened.
[00:31:52.800 --> 00:31:55.280] So we sign up in November and we start paying.
[00:31:55.280 --> 00:31:58.880] It's our first payment was.
[00:31:59.200 --> 00:32:01.680] It was like $5,000 or $6,000.
[00:32:02.640 --> 00:32:06.080] We're talking about for a small company, this is a significant amount of money.
[00:32:06.080 --> 00:32:15.440] Our first payment on November 3rd was $8,800, $8,800, almost $9,000.
[00:32:15.760 --> 00:32:17.040] And we're like, okay, well.
[00:32:18.000 --> 00:32:20.000] That's not us paying sales tax to someone.
[00:32:20.000 --> 00:32:22.320] That's just like fees for this company.
[00:32:22.320 --> 00:32:27.520] That's our payment to the sales tax compliance company that's going to help us and make our lives better.
[00:32:27.840 --> 00:32:31.040] So that's our first payment, November 3rd.
[00:32:31.040 --> 00:32:34.000] Then we waited and waited and waited.
[00:32:34.000 --> 00:32:37.040] And it's like, we're like, what's happened?
[00:32:37.120 --> 00:32:38.000] Like, what happens next?
[00:32:38.320 --> 00:32:42.080] Yeah, meanwhile, we're getting charged monthly for services we're not using yet.
[00:32:42.080 --> 00:32:50.720] So I reached out and the person we're supposed to talk to is not there.
[00:32:50.720 --> 00:32:51.840] They're on vacation.
[00:32:52.000 --> 00:32:54.720] Yeah, well, one, the guy that I talked to left the company.
[00:32:54.720 --> 00:32:56.560] Yeah, well, that happened later.
[00:32:56.560 --> 00:33:00.160] So it was like, we signed up right before Thanksgiving, I think.
[00:33:00.160 --> 00:33:00.960] So, okay, sure.
[00:33:00.960 --> 00:33:02.880] Thanksgiving is busy, whatever.
[00:33:02.880 --> 00:33:10.160] Then we contact them at the end of November and say, okay, we're ready.
[00:33:10.160 --> 00:33:13.760] And then we hear nothing.
[00:33:14.080 --> 00:33:16.960] We hear nothing for a week.
[00:33:16.960 --> 00:33:20.560] And then we get an out-of-office reply.
[00:33:20.880 --> 00:33:28.640] And then I sent an email to their general box: Hey, this is December 7th.
[00:33:28.640 --> 00:33:34.600] Hey, this guy's, we got an out-of-office reply, even though we emailed him a week ago.
[00:33:29.840 --> 00:33:35.400] Didn't hear anything.
[00:33:35.720 --> 00:33:43.560] Didn't hear anything until December 20th after I sent two more emails saying, Hey, we've paid you guys a bunch of money.
[00:33:43.560 --> 00:33:45.400] We still have not heard from anybody.
[00:33:45.400 --> 00:33:47.480] Finally, hear back from somebody.
[00:33:47.480 --> 00:33:52.680] They say, Oh, you're going to get somebody, you'll hear back from a colleague right away.
[00:33:54.280 --> 00:33:55.960] This is December 20th.
[00:33:55.960 --> 00:33:59.160] Did not hear back from somebody until January 8th.
[00:33:59.160 --> 00:34:01.480] Yeah, they were on vacation for three weeks, right?
[00:34:01.800 --> 00:34:02.360] Or something.
[00:34:03.320 --> 00:34:07.400] And then, meanwhile, we're like, we're trying to find somebody that can help us.
[00:34:07.400 --> 00:34:10.360] We've paid this company almost $10,000.
[00:34:10.360 --> 00:34:13.800] And we're like, we haven't, nothing has happened.
[00:34:13.800 --> 00:34:17.240] So we contact that original rep that you talked to.
[00:34:17.560 --> 00:34:18.360] Gone.
[00:34:18.360 --> 00:34:20.040] Nobody told us.
[00:34:20.680 --> 00:34:23.720] Our representative is no longer at the company.
[00:34:23.720 --> 00:34:30.600] I tracked him down on LinkedIn and he's like, oh, yeah, we had massive layoffs in December.
[00:34:30.600 --> 00:34:32.680] Like, tons of people got fired.
[00:34:32.680 --> 00:34:34.920] Meanwhile, I think we had an account manager.
[00:34:34.920 --> 00:34:36.280] We just never heard from them.
[00:34:36.280 --> 00:34:38.280] They never reached out and was like, hey, we're here to help.
[00:34:38.280 --> 00:34:39.000] And this and that.
[00:34:39.000 --> 00:34:45.720] We just got like automated emails of like, hey, sign in here and like fill out this document of all this information, which we had questions on.
[00:34:45.720 --> 00:34:47.080] Yeah, we had questions about.
[00:34:47.400 --> 00:34:54.360] Part of that initial money we paid was for this assessment in Illinois.
[00:34:54.360 --> 00:35:01.960] After we signed up, I looked at this and I'm like, it just, Illinois doesn't have sales tax for SaaS.
[00:35:01.960 --> 00:35:06.280] Why do we have to pay $3,500 for this assessment?
[00:35:06.920 --> 00:35:09.400] And nobody's answering.
[00:35:09.400 --> 00:35:10.360] Nobody's answering.
[00:35:10.360 --> 00:35:13.400] They're like, just you've got the assessment call coming up.
[00:35:13.880 --> 00:35:14.840] So we get on this call.
[00:35:15.600 --> 00:35:22.720] He's getting us to download Excel so we can load up their fucking document so we can paste in our transactions.
[00:35:22.720 --> 00:35:26.560] And about an hour in it, I'm like, listen, you guys still haven't answered the question.
[00:35:26.560 --> 00:35:35.280] Why are we even doing this assessment in the first place if Illinois sales tax is not taxable?
[00:35:35.600 --> 00:35:39.280] He said, well, I'm not sure about that.
[00:35:39.280 --> 00:35:40.560] You're not sure about that.
[00:35:40.560 --> 00:35:41.520] You're the expert.
[00:35:41.520 --> 00:35:43.520] You're doing the assessment with us.
[00:35:43.520 --> 00:35:46.240] He's like, and we've been on the call for an hour now.
[00:35:46.240 --> 00:35:48.880] Then he's like, let me check with my colleagues.
[00:35:48.880 --> 00:35:50.080] Checks with his colleagues.
[00:35:50.080 --> 00:35:52.960] I don't think we heard back again for another week or whatever.
[00:35:53.280 --> 00:35:56.160] We have to like keep responding.
[00:35:57.040 --> 00:36:01.840] They say, hey, we need to book another call with somebody, book another call with somebody, get on the call with her.
[00:36:01.840 --> 00:36:04.960] And I'm like, I'm just trying to figure out what's going on here.
[00:36:04.960 --> 00:36:09.280] We were charged $3,500 for an assessment that it looks like we don't need.
[00:36:09.280 --> 00:36:11.040] And I just want a clear answer.
[00:36:11.040 --> 00:36:13.360] And she's like, oh, okay, well, let's check into that.
[00:36:13.360 --> 00:36:16.720] By the way, I figured out that I'm here in Canada.
[00:36:16.720 --> 00:36:18.400] I don't know anything about U.S.
[00:36:18.400 --> 00:36:19.440] tax law or whatever.
[00:36:19.440 --> 00:36:24.800] It took me five minutes of Googling to realize I don't think we need to do this assessment.
[00:36:24.800 --> 00:36:27.120] I don't think we need to pay tax here.
[00:36:27.120 --> 00:36:30.240] These are the experts that we paid $10,000 to know this stuff.
[00:36:30.240 --> 00:36:32.480] So another hour phone call with her.
[00:36:32.480 --> 00:36:36.560] And then she's like, oh, yeah, you don't need to pay this assessment.
[00:36:36.560 --> 00:36:38.400] And now we're going to refund it for you.
[00:36:38.400 --> 00:36:45.680] It's like, so if I had never brought this up, you guys would have just done the assessment and kept our money and wasted all of our time.
[00:36:45.680 --> 00:36:51.760] And meanwhile, like as this is happening, we've been like, we keep getting like the same emails that are like these onboarding emails.
[00:36:51.760 --> 00:36:53.680] It's the same thing, but it's like a different person.
[00:36:53.680 --> 00:36:57.280] We're like ping-ponged around to like different teams that handle different things.
[00:36:57.600 --> 00:36:59.120] It's like, oh, yeah, we don't know about that.
[00:36:59.120 --> 00:37:01.080] We got our other team is like.
[00:37:01.720 --> 00:37:03.800] Yeah, talk to our other team.
[00:37:03.800 --> 00:37:06.200] It's like, you're supposed to be the experts.
[00:37:06.200 --> 00:37:08.760] You're supposed to make this easier for us.
[00:37:08.760 --> 00:37:16.840] And so finally, I got fed up and I just said, I sent them an email saying this is unacceptable.
[00:37:17.160 --> 00:37:25.800] And the thing that actually tipped me over the edge is I said, okay, you've already charged us $3,500 for something we didn't need.
[00:37:26.120 --> 00:37:32.760] I need to know, because they gave us a quote on filing in eight regions.
[00:37:32.920 --> 00:37:52.920] Just so folks at home know, in Stripe Tax, Stripe Tax monitors almost 100 different tax regions in the world where theoretically SaaS companies need to calculate, collect, and remit on behalf of these governments.
[00:37:52.920 --> 00:37:56.600] So there's about 100 regions.
[00:37:56.600 --> 00:38:05.560] This company that we paid $10,000 to, the quote they gave us was only for six or eight regions, I believe.
[00:38:06.200 --> 00:38:14.120] And that was a loan, $500 a month just for kind of like regular maintenance.
[00:38:14.120 --> 00:38:15.320] That's it.
[00:38:15.320 --> 00:38:17.160] Plus the amount we paid up front.
[00:38:17.160 --> 00:38:18.920] So minus the $3,500.
[00:38:18.920 --> 00:38:22.360] So plus this five grand deposit.
[00:38:22.360 --> 00:38:24.600] So I said, how is this going to scale?
[00:38:24.600 --> 00:38:36.760] If it costs us $500 a month for this, but that's only six regions, but theoretically, we will eventually maybe need to be collecting and remitting for 100.
[00:38:36.760 --> 00:38:41.320] I just need to know how are these costs are going to scale?
[00:38:41.320 --> 00:38:52.000] And they all have, all of these places have, you know, X number of invoices per month you get charged for, and then X number of regions, and then they've got this proprietary calculation, and it's all very enterprisey.
[00:38:52.320 --> 00:38:59.920] I said, I just need to know, let's say, 5,000 invoices a month, 55 regions, how much is that going to cost us?
[00:38:59.920 --> 00:39:02.720] And they could not give me an answer.
[00:39:03.040 --> 00:39:07.200] So I think you can all hear how frustrating this is.
[00:39:07.200 --> 00:39:15.840] Here's the problem: it's easy to bellyache about this because it's ridiculous, but we have to decide what we're going to do.
[00:39:15.840 --> 00:39:16.240] Yeah.
[00:39:16.240 --> 00:39:19.920] Yeah, I mean, it has consequences either way we do it.
[00:39:19.920 --> 00:39:23.040] It has consequences no matter how we do it.
[00:39:23.040 --> 00:39:32.000] Now, am I, do I really think the countries in the EU are going to go after small SaaS companies and levy fines against them?
[00:39:32.000 --> 00:39:32.960] Probably not.
[00:39:32.960 --> 00:39:36.880] Like, that's it's probably not a big concern.
[00:39:36.880 --> 00:39:38.560] But we want to do the right thing.
[00:39:38.560 --> 00:39:40.080] That's our inclination.
[00:39:40.080 --> 00:39:52.560] We want to do the right thing, but nobody's making this any, even if it was like we're not opposed to difficult work either.
[00:39:52.560 --> 00:40:03.040] We're also not opposed to paying, even though I think it's ridiculous that we have to incur costs so the government can collect and remit their own, collect their own taxes.
[00:40:03.040 --> 00:40:10.480] If it was as easy as just like, we're going to sign up and there's going to be a monthly fee for us, it's going to cost us more in accounting.
[00:40:10.480 --> 00:40:11.920] We get all that.
[00:40:11.920 --> 00:40:14.560] But this is a problem for John and I.
[00:40:14.560 --> 00:40:23.760] I think that's frustrating because really, this is the first time we've hit something where you and I could not just make progress.
[00:40:23.760 --> 00:40:24.160] Right.
[00:40:24.160 --> 00:40:32.200] And it's, yeah, it's something we get really frustrated thinking about and talking about, and then we just like don't talk about it because it's so annoying.
[00:40:29.440 --> 00:40:35.320] And we're like, we want to actually do things that help our customers.
[00:40:29.600 --> 00:40:36.600] We want to build things for our customers.
[00:40:36.840 --> 00:40:40.440] And every time we think about it, it's just like, oh, God, this is such a headache.
[00:40:40.440 --> 00:40:47.400] First of all, the other thing about merchants of record is because they're the merchant of record, they've exceeded the threshold in every tax region.
[00:40:47.400 --> 00:40:52.680] So you automatically just have to start remitting taxes for every tax region in the world.
[00:40:52.680 --> 00:40:58.840] So automatically, it's more for your customers and theoretically more for you.
[00:40:59.080 --> 00:41:08.760] The additional cost to switching to something like Paddle and the additional cost of having the additional accounting we would need and all that stuff, we could easily hire one person.
[00:41:08.760 --> 00:41:13.640] I bet you we could even hire easily one full-time person.
[00:41:13.640 --> 00:41:14.360] Probably.
[00:41:14.360 --> 00:41:21.480] With the money, the extra money it would take for us to be compliant.
[00:41:21.480 --> 00:41:29.080] That doesn't even count how much, how many hours we're wasting doing all these calls, trying to figure this out.
[00:41:29.080 --> 00:41:30.600] And we still haven't made any progress.
[00:41:31.000 --> 00:41:35.160] We've wasted thousands of dollars in productive time.
[00:41:35.320 --> 00:41:37.880] We're in the same spot we were at last year in April.
[00:41:38.040 --> 00:41:38.680] Last year.
[00:41:40.360 --> 00:41:43.000] We're just more jaded and more angry now.
[00:41:43.480 --> 00:41:47.240] Yeah, I think at one point we were starting getting emails from this company we signed up for.
[00:41:47.240 --> 00:41:49.560] Like they were the same emails to do the same thing over again.
[00:41:49.560 --> 00:41:54.440] And I was like, this is literally making me think I'm crazy because didn't we do this?
[00:41:54.440 --> 00:41:56.040] Or it's like a different person?
[00:41:56.040 --> 00:41:56.840] I don't.
[00:41:56.840 --> 00:41:57.400] Yeah.
[00:41:57.400 --> 00:41:57.880] Yeah.
[00:41:57.880 --> 00:41:59.960] It's so silly.
[00:41:59.960 --> 00:42:19.040] And if governments truly care about entrepreneurship, like small companies risking their time, energy, and capital to creating value in the world, if they truly cared about that, you got to take this off our plate somehow or make it easier somehow.
[00:42:19.040 --> 00:42:20.720] Yeah, they say they do, but they don't.
[00:42:20.720 --> 00:42:24.720] I mean, they would also do universal healthcare in the U.S.
[00:42:24.800 --> 00:42:30.320] So we won't have to worry about this shit and like how your health insurance is tied to a job and you can't start your own business.
[00:42:30.320 --> 00:42:33.840] This, by the way, is why business is political.
[00:42:33.840 --> 00:42:52.720] Like just having healthcare for entrepreneurs and small businesses, by the way, like healthcare for you and Jason, our two American employees, is still a nightmare compared to how easy it is for Helen and I because it's just covered.
[00:42:53.360 --> 00:42:58.640] Anyway, so folks, that's our rant on sales tax.
[00:42:58.880 --> 00:43:01.200] We still don't really know what we're going to do.
[00:43:02.000 --> 00:43:14.240] We're talking to, there's other companies that do this that are similar to TaxJar, that are cheaper, that remit in more areas.
[00:43:14.560 --> 00:43:31.440] It's still not, it's still incredibly difficult because the advice, we basically have to query their API and then give our EU customers a specific price when they sign up and then somehow collect that.
[00:43:31.440 --> 00:43:36.640] But then if we query their API, Stripe doesn't allow us to mark that as sales tax.
[00:43:36.640 --> 00:43:38.800] We have to just add it to the overall amount.
[00:43:38.800 --> 00:43:44.000] So then it just becomes this overall revenue in our account that we have to track somehow and then remit.
[00:43:44.000 --> 00:43:44.960] And it's like...
[00:43:45.120 --> 00:43:50.800] I mean, we could at some point actually turn Stripe tax collection on.
[00:43:50.800 --> 00:43:51.360] Yeah.
[00:43:51.360 --> 00:43:55.440] That still doesn't help us remit it and pay it, right?
[00:43:55.480 --> 00:43:59.880] Like, and on top of that, we're paying fees to Stripe for collecting sales tax.
[00:43:59.440 --> 00:44:02.920] Stripe tax is not cheap.
[00:44:03.240 --> 00:44:12.760] And like, I mean, you know, in some hopeful scenario, Stripe tax actually turns into something that does it for us, but it doesn't sound like that's happening.
[00:44:12.760 --> 00:44:29.160] Yeah, and honestly, like, again, if I was the Canadian government, if I was the Saskatchewan government, but Saskatchewan, Saskatchewan, Saskatchewan's come up a few times from friends of the show who are actually collecting and remitting tax.
[00:44:29.160 --> 00:44:40.040] Saskatchewan, as soon as you have one transaction in Saskatchewan, you need to register with their on their government website for sales tax and remit sales tax.
[00:44:40.040 --> 00:44:46.840] So Transistor, you know, we big company, not big company, but you know, we've got thousands of customers.
[00:44:46.840 --> 00:44:49.480] We have a handful of customers in Saskatchewan, if that.
[00:44:49.720 --> 00:44:52.600] Like, we don't have an accounting department and a tax and collect department.
[00:44:52.600 --> 00:44:54.040] Like bigger companies, I'm sure they do.
[00:44:54.040 --> 00:44:59.880] And it's just a cost of doing business for them, which I guess it would be for us too, but it's like.
[00:45:01.080 --> 00:45:11.400] You're going to make every small business in the world doing this kind of work, every e-commerce company, every software company, anybody selling anything digital, consulting over the border, anything.
[00:45:11.400 --> 00:45:19.800] You're going to make every single one of those companies, as soon as they charge their customer $50 for a digital download or whatever it is.
[00:45:19.800 --> 00:45:26.280] And so the tax, you know, that's whatever, that's $5 sales tax to Saskatchewan.
[00:45:26.600 --> 00:45:34.120] You're going to make those companies do all of that work for you so that you can get $5 in tax revenue.
[00:45:34.120 --> 00:45:34.680] Right.
[00:45:35.080 --> 00:45:36.680] That's the plan.
[00:45:37.640 --> 00:45:43.160] Here's an idea, Saskatchewan, and every other government official and tax.
[00:45:43.160 --> 00:45:46.800] So if you're listening, by the way, and I want to hear from you.
[00:45:44.600 --> 00:45:49.760] If you are with a government that collects sales tax, I want to hear from you.
[00:45:44.680 --> 00:45:51.040] I don't want you to come and arrest me.
[00:45:51.200 --> 00:45:53.360] I just want you to email me.
[00:45:53.360 --> 00:45:55.680] Go to Stripe directly.
[00:45:56.000 --> 00:46:01.440] Just go to Stripe and say, hey, you guys already know where everybody lives.
[00:46:01.440 --> 00:46:03.760] You already know all the revenue numbers.
[00:46:03.760 --> 00:46:11.520] You've already even enabled people to turn on Stripe Climate automatically and just automatically have revenue go places.
[00:46:11.840 --> 00:46:18.000] Just do this for every country, region, state, province, city.
[00:46:18.000 --> 00:46:23.280] I'm looking at you, Chicago, that wants to collect sales tax on SaaS.
[00:46:23.280 --> 00:46:23.920] Great.
[00:46:23.920 --> 00:46:25.120] Do it.
[00:46:25.120 --> 00:46:27.840] Just don't make every small business do it.
[00:46:27.840 --> 00:46:28.800] Go to Stripe.
[00:46:28.800 --> 00:46:30.800] Get them to do it for you.
[00:46:30.800 --> 00:46:32.480] Way easier.
[00:46:32.480 --> 00:46:52.960] And honestly, you will make so much more money than now instead of having millions of companies registering on your crummy government website, you just need to make one deal with Stripe and you're done for the vast majority of e-commerce, SaaS, et cetera.
[00:46:52.960 --> 00:46:55.520] That's the advice.
[00:46:55.840 --> 00:46:58.000] And we don't know what we're going to do.
[00:46:58.000 --> 00:47:00.400] I'd love to hear what people are doing.
[00:47:00.720 --> 00:47:02.640] John, I think we've said enough.
[00:47:02.640 --> 00:47:03.680] I think we have.
[00:47:04.000 --> 00:47:06.800] You want to thank our Patreons.
[00:47:06.800 --> 00:47:10.800] We've got our nice Patreon page that we can now read from.
[00:47:10.800 --> 00:47:11.760] It's just automatic.
[00:47:11.760 --> 00:47:13.840] We know who's a current supporter.
[00:47:13.840 --> 00:47:16.080] 17 people who have stuck with us.
[00:47:16.080 --> 00:47:16.800] Who are they?
[00:47:16.800 --> 00:47:19.360] Thanks to everyone who's stuck with us through all this.
[00:47:19.760 --> 00:47:23.760] We've got Mitchell Davis from recruitkit.com.au.
[00:47:23.760 --> 00:47:26.960] Marcel Fale from WeAreBold.af.
[00:47:26.960 --> 00:47:40.440] Ole Kulik, Ethan Gunderson, Anthon Zorin from Prodcamp.com, Bill Kondo, Alex Payne, Ward from memberspace.com, Russell Brown from Fotivo.com.
[00:47:40.440 --> 00:47:41.080] That's right.
[00:47:41.080 --> 00:47:48.120] Evandra Sassi, Austin Lovelace, Michael Sitber, Fathom Analytics signed up again, I think.
[00:47:48.120 --> 00:47:49.160] Re-signed up.
[00:47:49.160 --> 00:47:49.480] Yeah.
[00:47:49.480 --> 00:47:49.960] Yep.
[00:47:51.400 --> 00:47:52.680] That's Jack and Paul.
[00:47:52.680 --> 00:47:53.160] Yep.
[00:47:53.160 --> 00:47:54.040] Gray guys.
[00:47:54.200 --> 00:47:55.720] My brother Dan Buddha.
[00:47:55.720 --> 00:47:59.480] Colin Gray, Darby Frey, and Dave Junta.
[00:47:59.480 --> 00:48:01.240] Junta.
[00:48:01.880 --> 00:48:03.240] How come Dave shows up at the end?
[00:48:03.240 --> 00:48:05.080] Because he's the longest supporter?
[00:48:05.080 --> 00:48:05.880] I think so.
[00:48:05.880 --> 00:48:06.280] Damn.
[00:48:06.280 --> 00:48:09.480] I wonder if he feels like he could just never cancel this subscription.
[00:48:09.480 --> 00:48:09.960] I don't know.
[00:48:09.960 --> 00:48:11.240] I should ask him.
[00:48:12.520 --> 00:48:21.400] Tell Dave that no matter what, even if he cancels, he is an honorary, he will get shouted out every episode.
[00:48:21.400 --> 00:48:23.480] Friends, thanks so much for listening.
[00:48:23.480 --> 00:48:25.000] We will see you again soon.
[00:48:25.000 --> 00:48:27.080] We're going to put it on the calendar.
[00:48:27.080 --> 00:48:28.840] Tell your friends.
[00:48:28.840 --> 00:48:31.720] And yeah, we'll see you next time we record.
[00:48:47.480 --> 00:48:48.360] Saskatchewan?
[00:48:48.360 --> 00:48:49.400] Saskatchewan.
[00:48:49.400 --> 00:48:50.440] Saskatchewan.
[00:48:50.440 --> 00:48:51.080] Saskatchewan?
[00:48:51.240 --> 00:48:52.120] Saskatchewan.
[00:48:52.120 --> 00:48:52.840] Saskatchewan.
[00:48:52.840 --> 00:48:53.560] Saskatchewan.
[00:48:53.560 --> 00:48:54.600] To Saskatchewan.
[00:48:54.600 --> 00:48:55.960] Saskatchewan.
[00:48:56.920 --> 00:48:59.160] Saskatchewan.
[00:49:01.080 --> 00:49:03.160] Saskatchewan.
[00:49:05.400 --> 00:49:07.160] Saskatchewan.
[00:49:11.400 --> 00:49:15.000] Podcast hosting is provided by Transistor.fm.
[00:49:15.280 --> 00:49:26.560] They host our MP3 files, generate our RSS feed, provide us with analytics, and help us distribute the show to Spotify, Apple Podcasts, and more.
[00:49:26.560 --> 00:49:37.680] If you want to start your own podcast or you want to switch to Transistor, go to transistor.fm slash Justin and get 15% off your first year.

Prompt 2: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 3: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 4: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Full Transcript

[00:00:00.240 --> 00:00:03.120] This podcast is hosted by Transistor.fm.
[00:00:18.640 --> 00:00:19.520] Hey, everyone.
[00:00:19.520 --> 00:00:20.960] Welcome to Build Your Sass.
[00:00:21.120 --> 00:00:24.800] This is the behind the scenes story of building a web app in 2023.
[00:00:24.800 --> 00:00:27.280] I'm John Buddha, a software engineer.
[00:00:27.280 --> 00:00:28.720] And I'm Justin Jackson.
[00:00:28.720 --> 00:00:32.560] So happy to be back with our first episode of 2023.
[00:00:32.560 --> 00:00:34.560] I do product and marketing.
[00:00:34.560 --> 00:00:40.800] And thanks for following along as we continue to build Transistor.fm.
[00:00:44.640 --> 00:00:46.480] It's been a while since we recorded.
[00:00:46.480 --> 00:00:53.440] Yeah, the last episode was three or four months ago, I think, with the whole team after our team retreat.
[00:00:53.440 --> 00:00:53.840] Yeah.
[00:00:53.840 --> 00:00:54.880] What are we going to do about this?
[00:00:54.880 --> 00:00:59.360] Are we going to, do we just need to say, you know what, we're going to jump back on the horse?
[00:00:59.360 --> 00:01:02.240] Or I'm always confused what to do with this show.
[00:01:02.240 --> 00:01:02.640] Yeah.
[00:01:02.640 --> 00:01:06.000] I think we should, yeah, I think we should try to do it at least twice a month.
[00:01:06.000 --> 00:01:06.480] Okay.
[00:01:06.480 --> 00:01:10.960] Listener, if you're still here with us, first of all, hey, thanks.
[00:01:11.520 --> 00:01:12.960] We're on Mastodon now.
[00:01:12.960 --> 00:01:15.120] You can reach out on Mastodon, say hi.
[00:01:15.440 --> 00:01:16.800] I'm still on Twitter.
[00:01:16.960 --> 00:01:18.560] You can still say hi there.
[00:01:18.880 --> 00:01:20.320] Are you still on Mastodon, John?
[00:01:21.920 --> 00:01:22.800] I poke around.
[00:01:22.800 --> 00:01:24.080] I haven't really used it much, but yeah.
[00:01:24.720 --> 00:01:25.120] Okay.
[00:01:25.120 --> 00:01:29.520] Well, go follow John Buddha on Mastodon while he's still on Provider for Republic.
[00:01:29.760 --> 00:01:34.800] I deleted all of my history and basically don't use it.
[00:01:35.360 --> 00:01:40.800] Before Elon shuts off the API, so you can't delete your tweets anymore.
[00:01:41.440 --> 00:01:42.960] That's probably a whole podcast, too.
[00:01:43.360 --> 00:01:44.320] It is.
[00:01:44.640 --> 00:01:54.480] I actually think, I mean, we could record more often because I think now that once we got on the pre-call, I was like, man, there's actually some stuff to talk about.
[00:01:54.480 --> 00:03:34.240] Plus, I think the nice thing about podcasting, which we've said from the beginning, is that it it forced you and i to get on a call together and i think it's just so easy especially at this stage for you and i to not touch base even though we should be touching base and we keep we keep saying that and we never do yeah i have other friends who run a company and they like they hop on a call i think once a week and just like do a walk and talk for like an hour we should do more walk and talks too i have it's it's gotta warm up here soon but sooner yeah i mean i'm walking every morning so i'm i'm i'm out um one thing that actually we did we did implement that i think has been good is we have this once a month meeting where we just go through our books but that's been a nice one because we end up talking about other stuff and even if it's just a 15 minute call to you know clean up our accounting do some admin work uh talk about sales tax which we're going to get into today uh yeah that's been good yeah so listener we're going to try and record more episodes we'll put it in the calendar as a repeating thing yeah we used to have one of those yeah we should just we should just do it we should just have it in there maybe we should record on tuesdays and then just release it the following tuesday that's kind of a nice yeah that could work uh i'm gonna be on the mixergy podcast tomorrow which will be kind of a big deal because that's one of the podcasts that got me into podcasting.
[00:03:34.240 --> 00:03:34.880] Oh, nice.
[00:03:35.120 --> 00:03:41.440] A really popular business show from a long time back, Andrew warner.
[00:03:41.440 --> 00:03:42.800] So that'll be kind of fun.
[00:03:42.800 --> 00:03:46.640] I'm waking up at, well, I have to do that one at 8:30 a.m.
[00:03:46.960 --> 00:03:47.840] How are you feeling?
[00:03:47.840 --> 00:03:48.800] How's work?
[00:03:49.440 --> 00:03:51.040] What's our new year's update?
[00:03:51.040 --> 00:03:51.520] I'm good.
[00:03:51.520 --> 00:03:52.560] Yeah, work's been good.
[00:03:52.560 --> 00:03:55.840] I think, you know, I think the year ended really well.
[00:03:56.400 --> 00:04:04.240] We definitely had a bit of a slowdown over the holidays, work-wise, and just holidays and everything.
[00:04:05.040 --> 00:04:05.600] Yeah.
[00:04:05.840 --> 00:04:06.560] It's been good.
[00:04:06.560 --> 00:04:12.640] I think it was hard for me to get back into the swing of things after the new year.
[00:04:13.520 --> 00:04:16.480] And then I got sick for like 10 days or something.
[00:04:16.480 --> 00:04:17.120] Oh, yeah.
[00:04:17.520 --> 00:04:20.560] Had a bad cold that was going around.
[00:04:22.080 --> 00:04:26.640] But yeah, it was like slow getting back into and like trying to get back into something.
[00:04:26.960 --> 00:04:30.960] We haven't really worked on any big features yet.
[00:04:30.960 --> 00:04:40.400] Like we've been finishing up some stuff that I, you know, we had started in the previous year, but yeah, it was like, it wasn't like I just wanted to jump back anything.
[00:04:40.400 --> 00:04:42.480] It was like kind of had to slowly ramp back up.
[00:04:42.480 --> 00:04:53.760] And Jason and I have been working on different things and he's been working on some like you know features that aren't necessarily front-facing that users will see your customers.
[00:04:55.040 --> 00:04:57.280] So it's, I mean, overall, I think it's been great.
[00:04:57.280 --> 00:04:59.040] I still love it, obviously.
[00:04:59.040 --> 00:04:59.520] Yeah.
[00:04:59.760 --> 00:05:01.280] Love working with the team and everyone.
[00:05:01.280 --> 00:05:08.960] And, but I think Jason and I want to try to tag team some more features after like we finish up what we're doing now.
[00:05:08.960 --> 00:05:12.400] And like, because we did a couple of those and they were definitely more fun.
[00:05:12.640 --> 00:05:14.880] We're working on the same thing, going back and forth.
[00:05:14.880 --> 00:05:30.600] And yeah, that energy you two have when you're both working on the same thing is there's something about that that honestly, I put this in my urine review, but I've been jealous of it when you guys really get going on something.
[00:05:30.760 --> 00:05:38.440] It's like, oh, that kind of that the fire burns hotter when you know you're both on the same thing.
[00:05:38.440 --> 00:05:46.920] And we haven't really made it a point to do that, and we haven't been necessarily great about planning and shaping a feature beforehand.
[00:05:46.920 --> 00:05:48.440] Yeah, it's been a while since we did.
[00:05:48.520 --> 00:05:53.160] I think it was like maybe the dynamic audio stuff that we did.
[00:05:53.160 --> 00:05:53.560] Yeah.
[00:05:53.640 --> 00:05:57.320] Was the last one we really worked on together at the same time?
[00:05:58.440 --> 00:06:00.440] But yeah, it'll be good to get back into that.
[00:06:00.440 --> 00:06:00.680] I think.
[00:06:00.840 --> 00:06:04.440] And right now you've been working on this new.
[00:06:04.440 --> 00:06:05.400] Can we talk about that?
[00:06:05.400 --> 00:06:06.360] This Patreon feature?
[00:06:06.840 --> 00:06:07.320] Yeah.
[00:06:07.880 --> 00:06:13.800] So we had this big, we want to add monetization to Transistor.
[00:06:13.800 --> 00:06:21.720] We just think we've noticed when podcasters are earning some revenue from their show, they're more likely to do it.
[00:06:21.720 --> 00:06:28.280] Even like you and I, the reason, one of the reasons I want to record this show is because there's still people supporting us on Patreon.
[00:06:28.280 --> 00:06:28.760] Right.
[00:06:28.760 --> 00:06:32.600] And it feels like, oh, we got to like do it for our fans.
[00:06:32.600 --> 00:06:40.200] You know, we got to do it for the people that love the show and have been kind of supporting it from the beginning.
[00:06:40.200 --> 00:06:44.760] So we wanted to give that same energy to other people.
[00:06:44.760 --> 00:06:54.040] And so we've got a really cool Patreon feature that allows you to integrate with Patreon more deeply, I guess, right?
[00:06:54.040 --> 00:07:01.880] Like we're going to pull, like automatically pull your supporters from Patreon into your transistor website.
[00:07:01.880 --> 00:07:05.960] They'll be listed there on your website automatically.
[00:07:05.960 --> 00:07:07.080] In your show notes.
[00:07:07.480 --> 00:07:08.760] In your show notes, yeah.
[00:07:08.480 --> 00:07:11.880] Yeah, yeah, and that I think that's a starting point for monetization.
[00:07:11.880 --> 00:07:22.880] Like, there's a lot of our customers who use Patreon, but there's no great way for them to have a list of supporters like we do every week, or every not every week, but every episode with who's still supporting the show.
[00:07:22.880 --> 00:07:24.960] And yeah, that'll be that should be out soon.
[00:07:24.960 --> 00:07:29.440] I mean, it's live on our Build Your Saus website now to test it out.
[00:07:29.440 --> 00:07:30.240] Yeah.
[00:07:30.800 --> 00:07:37.920] And there'll also be this little widget that allows people to set their goal for the month and with a call to action on there.
[00:07:37.920 --> 00:07:45.600] So we're going to be giving podcasters the tools to have more calls to action for people to support.
[00:07:45.600 --> 00:07:48.400] I have a little progress indicator.
[00:07:48.400 --> 00:07:50.240] I'm actually really excited about this one.
[00:07:50.240 --> 00:07:54.240] I think once we release this, it's going to give us a lot of energy.
[00:07:54.240 --> 00:07:54.640] Yeah.
[00:07:54.960 --> 00:07:56.560] And yeah, I'm feeling good.
[00:07:56.560 --> 00:08:04.880] Actually, I've been hired Josh Anderton as a contractor to do a bunch of work with me on the marketing site.
[00:08:05.520 --> 00:08:10.560] And I have found that really invigorating.
[00:08:10.560 --> 00:08:16.160] Like he just, I get him to just book a bunch of days with me on my calendar.
[00:08:16.160 --> 00:08:34.400] And because I found like I was just getting into this habit of just work was just kind of happening to me, you know, like I'd show up, go through all of our support messages, go through all my emails, go through Slack, then like, you know, pick off something, but the energy wasn't there.
[00:08:34.400 --> 00:08:41.920] And having to show up on a call and often Josh has been like working on shit, so he has stuff to show me.
[00:08:41.920 --> 00:08:42.400] Yeah.
[00:08:42.400 --> 00:08:48.480] And it's like so energizing to have somebody else there.
[00:08:48.800 --> 00:08:49.440] Yeah, it is.
[00:08:49.440 --> 00:08:52.640] That's how I felt before we hired Jason.
[00:08:52.640 --> 00:09:03.320] Like it was, you know, COVID and we were both just kind of working remotely and it was easy to just kind of not, some days just not do much at all.
[00:08:59.520 --> 00:09:03.640] Yeah.
[00:09:04.280 --> 00:09:08.760] Even though you might be sitting at your desk, right?
[00:09:08.760 --> 00:09:11.240] I was definitely in a bit of a slump.
[00:09:11.880 --> 00:09:15.640] So it's been nice to, like, we shipped so much.
[00:09:15.640 --> 00:09:23.080] I, just that feeling of momentum, you know, when you get on it, like, and sometimes again, you know, the holidays happen, you have to ramp back up.
[00:09:23.080 --> 00:09:30.040] And, but for me, it was nice because I, because Josh is a contractor, he's motivated to want to book sessions.
[00:09:30.040 --> 00:09:33.240] So he's like, yeah, sure, I'll book three days with you this week.
[00:09:33.240 --> 00:09:37.880] And it's like, oh, perfect, because I know those three days, I got to show up.
[00:09:38.200 --> 00:09:45.240] And then it's going to be energizing to be like, okay, like, what, what do I need to have ready for this?
[00:09:45.240 --> 00:09:47.000] What are we going to do next?
[00:09:47.000 --> 00:09:48.200] How are we thinking through this?
[00:09:48.200 --> 00:09:49.640] What problems need to be solved?
[00:09:49.640 --> 00:09:59.320] It's just, there is something, yeah, there's something about that that is energizing.
[00:09:59.640 --> 00:10:02.200] So, yeah, I've been enjoying that.
[00:10:02.200 --> 00:10:15.560] And there's problems that I'm working on now, like search engine optimization that I didn't think I'd like, but I'm really like enjoying solving this mystery of how to get us ranking higher.
[00:10:15.560 --> 00:10:24.120] And are we making changes that are actually affecting, you know, the site and our rank and all that stuff.
[00:10:24.520 --> 00:10:38.600] Dear listener, if you could do me a favor and just search on Google how to start a podcast and scroll down until you find transistor and then click on transistor, I would love that.
[00:10:38.600 --> 00:10:44.720] Because, yeah, we're just a small little company trying to compete, you know.
[00:10:45.040 --> 00:10:46.560] But it's fun.
[00:10:46.560 --> 00:10:52.080] We could talk about so one quick story before we get, I want to talk about sales tax compliance.
[00:10:52.080 --> 00:10:52.560] Actually, you know what?
[00:10:52.560 --> 00:10:54.400] Let's just get into it.
[00:10:54.720 --> 00:10:55.040] Okay.
[00:10:55.360 --> 00:10:57.440] Because it's a very exciting topic.
[00:10:57.440 --> 00:10:59.040] It's very exciting.
[00:10:59.040 --> 00:11:01.440] Very few people are talking about it.
[00:11:01.440 --> 00:11:16.240] And especially in the United States, I think our European counterparts have a very different point of view on this and a different sentiment about it and a different kind of even cultural history with VAT.
[00:11:16.240 --> 00:11:22.400] A lot of them don't like VAT or, you know, the other sales taxes they have in the UK.
[00:11:24.240 --> 00:11:26.400] But they've learned to live with it.
[00:11:26.400 --> 00:11:32.480] And it's culturally enshrined there as like, we just know we got to do this, we got to deal with it.
[00:11:32.800 --> 00:11:43.600] But in the US and Canada, sales tax on software as a service is still relatively a new concept.
[00:11:43.600 --> 00:11:44.080] Yeah.
[00:11:45.040 --> 00:11:56.320] So much so that when I tweeted about this back in October 2022 and said, fellow founders, what are you doing for sales tax registration, calculation, collection, and remittance globally?
[00:11:56.320 --> 00:11:58.640] Very few people responded.
[00:11:58.640 --> 00:12:05.120] And the people who do respond, there's kind of a few responses.
[00:12:05.120 --> 00:12:12.080] There's people in Europe who just have this kind of idea that, well, of course, you've got to, everybody collects sales tax.
[00:12:12.080 --> 00:12:22.240] And of course, you've got to remit sales tax to every region in the world, every province, state, country that wants you to collect sales tax for them.
[00:12:22.240 --> 00:12:24.240] You need to do that for them.
[00:12:24.240 --> 00:12:26.240] And this is just a part of life.
[00:12:26.240 --> 00:12:29.920] There's folks that use merchants of record like Paddle and Gummy.
[00:12:31.640 --> 00:12:47.480] And most folks, I think, are not doing much or have not done much and are not planning on doing much if they run a company in the U.S.
[00:12:47.480 --> 00:12:48.600] or Canada.
[00:12:48.600 --> 00:12:50.680] Would you agree with that assessment so far?
[00:12:50.680 --> 00:12:51.640] Yeah, I would agree with that.
[00:12:51.640 --> 00:12:59.800] I mean, it's even a thing when we started talking about this and we realized that, oh, maybe we have to start thinking about this and doing something about it.
[00:12:59.800 --> 00:13:06.200] Like, I was looking at some of our receipts for services we pay for, and it's like all over the board.
[00:13:06.200 --> 00:13:11.320] I mean, even like large corporations that we pay don't charge a sales tax, which makes no sense.
[00:13:11.320 --> 00:13:11.880] Yes.
[00:13:12.200 --> 00:13:13.080] At all.
[00:13:13.080 --> 00:13:16.520] And then smaller ones, some of them do, and then most of them don't.
[00:13:16.520 --> 00:13:18.920] Some of them have started to recently.
[00:13:18.920 --> 00:13:19.480] Yeah.
[00:13:20.040 --> 00:13:22.760] But like, yeah, it's weird stuff.
[00:13:22.840 --> 00:13:27.400] Like, some of the bigger corporations still don't, and you think they would have to.
[00:13:27.400 --> 00:13:30.520] So that raises the question of like, do we need to?
[00:13:30.520 --> 00:13:31.080] What?
[00:13:31.400 --> 00:13:33.640] Yeah, it's just, it's frustrating.
[00:13:33.640 --> 00:13:45.480] And even I was listening to the Basecamp podcast, and David and Jason were talking about how they just recently solved this problem.
[00:13:45.480 --> 00:13:49.400] And it was like, it cost them, I think they said $6 million or something.
[00:13:49.720 --> 00:13:54.600] Millions in back sales taxes they had to pay that they never collected because they just didn't.
[00:13:54.920 --> 00:13:57.720] Maybe I'll get Chris to play a little clip of that right here.
[00:13:57.720 --> 00:14:03.320] But also, should we have waited 20 years to get a proper head of finance in to run things?
[00:14:03.320 --> 00:14:05.800] Yeah, okay, maybe that was a little too far, right?
[00:14:05.800 --> 00:14:11.240] In fact, that's one of those examples where there's almost a sticker price you can put on that.
[00:14:11.560 --> 00:14:14.280] Several years back, maybe this is five years back or something.
[00:14:14.280 --> 00:14:32.400] We realized that we hadn't been doing the right things around sales tax and that there were actually all sorts of obligations we had in the individual states because we're a remote company and you end up creating this thing called Nexus if you have employees in different states.
[00:14:32.400 --> 00:14:36.880] A nexus being that the state has a right to essentially tax you.
[00:14:36.880 --> 00:14:42.560] Now there's even more rules around just doing enough business in a given state means that you are liable for sales tax.
[00:14:42.640 --> 00:14:46.080] We hadn't really followed up on that because we didn't have anyone to follow up on that.
[00:14:46.080 --> 00:14:48.320] We had no one minding that risk.
[00:14:48.320 --> 00:15:00.160] And we ended up spending several million dollars out of pocket to settle back taxes when we realized by ourselves before getting audited or anything, you know what, we haven't been running this right.
[00:15:00.160 --> 00:15:07.600] So if Base Camp is just realizing now that they need to do something here, and to their credit, they did.
[00:15:07.600 --> 00:15:11.200] It cost them a bunch of money and they solved it.
[00:15:11.520 --> 00:15:16.480] But the implementation in North America is all over the board.
[00:15:16.480 --> 00:15:23.360] I even had a, I reached out to a bunch of founders in the kind of back channels because I wasn't getting any responses publicly to this tweet.
[00:15:23.360 --> 00:15:26.720] So I'm like, okay, I got to figure out what are people doing.
[00:15:26.720 --> 00:15:34.000] And, you know, I had a founder of a very well-known, successful indie SAS who's doing a lot more revenue than us.
[00:15:34.000 --> 00:15:37.920] And he's saying, I'd rather do almost anything than think about this stuff.
[00:15:37.920 --> 00:15:41.120] I recommend you just violate tax law.
[00:15:42.400 --> 00:15:45.440] And here's the thing.
[00:15:45.440 --> 00:15:49.840] Again, I think European founders will look at North Americans and go, what are you talking about?
[00:15:49.840 --> 00:15:50.880] You just have to do this.
[00:15:50.880 --> 00:15:52.480] This is just part of life.
[00:15:52.480 --> 00:15:55.440] This is just part of running a business.
[00:15:55.440 --> 00:15:55.840] Right.
[00:15:56.160 --> 00:15:57.920] The government has a right to charge you.
[00:15:58.240 --> 00:16:05.160] No, that's the thing, but it hasn't been for a long time, especially with internet sales that cross borders.
[00:16:05.320 --> 00:16:09.560] It's just not, it hasn't really been a requirement until the last couple of years, even.
[00:16:09.560 --> 00:16:11.000] Yeah, I mean, in the U.S.
[00:16:11.000 --> 00:16:11.720] and Canada.
[00:16:11.720 --> 00:16:12.200] Right, right.
[00:16:12.280 --> 00:16:12.440] U.S.
[00:16:12.520 --> 00:16:15.000] and Canada's just started this.
[00:16:15.480 --> 00:16:35.480] And I mean, you can go back to our VAT, like, there's conversations on the web about VAT that when that came out, North American software companies, by and large, were saying, we are not going to collect and remit sales tax for foreign governments.
[00:16:35.480 --> 00:16:36.440] Why would we do that?
[00:16:36.440 --> 00:16:41.160] That's just culturally, that makes no sense here.
[00:16:41.480 --> 00:16:50.440] And even if we can just take a slight detour, I think the way people see these taxes is actually flawed.
[00:16:50.440 --> 00:16:55.320] A lot of people are like, well, you have, if the government is charging your business a tax, you have to pay it.
[00:16:55.320 --> 00:17:00.440] These sales taxes are not a charge on businesses.
[00:17:00.440 --> 00:17:03.880] These are attacks on customers.
[00:17:03.880 --> 00:17:16.280] So the government has outsourced, has externalized the calculation, collection, and remittance, and auditing and admin of sales tax.
[00:17:16.280 --> 00:17:20.600] They have outsourced that to businesses and small businesses.
[00:17:20.600 --> 00:17:27.160] It should be clear that this is not like an income tax that businesses are paying.
[00:17:27.160 --> 00:17:29.160] We've always paid our income taxes.
[00:17:29.160 --> 00:17:31.080] We pay our state taxes.
[00:17:31.080 --> 00:17:34.440] We pay our employee taxes.
[00:17:34.440 --> 00:17:39.240] Those are all taxes on employers and on businesses.
[00:17:39.240 --> 00:17:41.880] This is an externality.
[00:17:42.200 --> 00:17:52.400] The governments around the world have just said: the way we're going to collect these taxes is we're going to force businesses to do this for us.
[00:17:52.400 --> 00:17:55.120] And I think that's a mistake.
[00:17:55.120 --> 00:17:58.400] And there's a better, more efficient way to do it.
[00:17:58.400 --> 00:18:04.080] I think governments are missing out on so much sales tax revenue.
[00:18:04.080 --> 00:18:11.040] Even, like you said, if you look at the vendors, how many vendors are not doing this properly?
[00:18:11.040 --> 00:18:11.600] Right.
[00:18:12.080 --> 00:18:24.240] My guess is if, for example, all of these governments around the world, if they made the payment processors responsible, so they're still outsourcing it.
[00:18:24.240 --> 00:18:27.440] They're still outsourcing, externalizing the costs.
[00:18:27.440 --> 00:18:36.960] But if they're going to do that, make the payment processors the ones who are responsible for calculating, collecting, and remitting sales tax.
[00:18:36.960 --> 00:19:01.680] Then instead of having to go after whatever it is, millions of small businesses around the world that are e-commerce businesses and software businesses and software as a service businesses, instead of having to go after all of these companies that can sell internationally quite easily, just go after American Express, MasterCard, Visa, Paddle, Stripe.
[00:19:02.400 --> 00:19:07.200] That list is maybe 10 to 20 people, 10 to 20 companies.
[00:19:07.200 --> 00:19:20.800] Instead of going after millions, they would instantly, instantly, they would, my guess is they would double sales tax revenue from these kinds of businesses.
[00:19:20.800 --> 00:19:21.840] Yeah, I mean, it's kind of insane.
[00:19:22.360 --> 00:19:29.720] You know, you have some states, like I think Texas and Florida that don't have income tax and they rely on sales tax to supplement that.
[00:19:29.360 --> 00:19:35.080] Or I get maybe property tax, but and they're just missing out on tons of revenue for this stuff.
[00:19:35.560 --> 00:19:40.520] If you want to charge our customers sales tax, that's fine.
[00:19:40.520 --> 00:19:42.600] I'm not anti-sales tax.
[00:19:42.920 --> 00:19:45.560] Sales taxes are, what do you call those taxes?
[00:19:46.840 --> 00:19:53.320] They're consumption taxes, so they're generally pretty good because the more a customer spends, the more they have to pay in tax.
[00:19:53.320 --> 00:19:54.200] Makes sense, right?
[00:19:54.200 --> 00:19:57.720] The more money you have to spend, the more tax you can get.
[00:19:57.720 --> 00:20:00.040] I'm totally fine with that.
[00:20:00.040 --> 00:20:18.600] But I think once people understand the costs that small businesses like us have to take on on behalf of the governments so that we can do this work for them, I think they would be very surprised.
[00:20:18.600 --> 00:20:22.920] And the best example of this is: well, there's two good examples of this.
[00:20:22.920 --> 00:20:30.120] One, Paddle, which is about, oh, see, I don't want to get in trouble, but I think Paddle is what, 10% or something?
[00:20:30.600 --> 00:20:32.040] Let me go back up here.
[00:20:32.040 --> 00:20:37.160] Paddle is 5% plus 50 cents per transaction.
[00:20:37.800 --> 00:20:42.440] Stripe's base rate is 2.9% plus 30 cents per transaction.
[00:20:42.440 --> 00:20:49.160] And Stripe will often give you a volume discount once you hit a certain threshold.
[00:20:49.160 --> 00:20:52.920] Like we pay less than that to Stripe.
[00:20:52.920 --> 00:21:01.000] So if we were going to switch to a merchant of record like Paddle, we would be paying a lot more in transaction fees.
[00:21:01.000 --> 00:21:06.920] And the only reason we're doing that, by the way, is not because Paddle has better features or whatever.
[00:21:06.920 --> 00:21:14.040] Like, that would be an incredibly costly exercise for us to rip out Stripe and then put Paddle in.
[00:21:14.040 --> 00:21:24.160] The only reason we would do that is so that the government, the governments, can collect their sales tax revenue that has nothing to do with us.
[00:21:24.160 --> 00:21:24.560] Right.
[00:21:24.560 --> 00:21:25.200] It's weird.
[00:21:25.200 --> 00:21:34.640] All this time and money we've already spent trying to do this stuff is like you're just paying for the privilege to collect money that you never see anyway.
[00:21:34.880 --> 00:21:35.760] Who's privilege?
[00:21:35.760 --> 00:21:37.440] Like, yeah, I know it's not a privilege.
[00:21:37.600 --> 00:21:39.360] I mean, I say that sarcastically.
[00:21:40.560 --> 00:21:41.200] You know what?
[00:21:41.200 --> 00:21:48.720] It would even be different if instead these international governments said, hey, you know what?
[00:21:48.720 --> 00:21:55.920] We're actually going to charge you an income tax based on the revenue you earn in our country.
[00:21:55.920 --> 00:22:08.240] That would be easier and cheaper for us because then we just say, okay, well, Lithuania, every sale we make in Lithuania, we have to send them 5% because that's their income tax.
[00:22:08.240 --> 00:22:10.240] And then we could decide if we want to do that.
[00:22:10.240 --> 00:22:15.680] But that is way easier to just say, how much money did we collect in Lithuania?
[00:22:15.680 --> 00:22:17.120] Okay, it's $100.
[00:22:17.120 --> 00:22:20.400] Okay, we'll send them $5, whatever.
[00:22:20.400 --> 00:22:24.560] And, you know, especially if there was a good API for it, fine.
[00:22:24.880 --> 00:22:56.320] The difference is these governments want us to track every single customer, every single transaction on their behalf, keep records, register individually in every single state, province, and country around the world, remit quarterly, often manually by logging into their bullshit website, paying accounting firms and tax compliance firms massive amounts of money to do these things.
[00:22:56.320 --> 00:23:03.240] And the record keeping that we have to do on top of this, like we have to track every charity and tax exempt.
[00:23:03.240 --> 00:23:12.760] Like this charity, this church is tax exempt in Illinois, but it's not tax exempt, but churches, you know, aren't tax exempt in Lithuania.
[00:23:12.760 --> 00:23:14.040] Like we got to track all that shit.
[00:23:14.280 --> 00:23:19.720] And we have to track their tax exempt documentation and keep it updated like every year.
[00:23:19.720 --> 00:23:21.080] And keep it updated.
[00:23:21.080 --> 00:23:22.520] And we have, we're a team of four people.
[00:23:22.520 --> 00:23:25.560] We're not like, who's going to do this?
[00:23:25.880 --> 00:23:29.480] This is honestly crazy making.
[00:23:30.040 --> 00:23:36.360] The whole endeavor, and I'm surprised more SaaS companies aren't talking about it.
[00:23:36.360 --> 00:23:39.080] Now, let's look at the risk side of this.
[00:23:39.320 --> 00:23:47.960] The whole reason you and I even got into this is because I was doing some stuff on my side, transferring my share ownership and doing some other things.
[00:23:47.960 --> 00:23:52.760] And I had to employ a tax accountant at a big firm.
[00:23:52.760 --> 00:23:54.680] And they were just asking questions.
[00:23:54.680 --> 00:23:57.000] And I said, they asked about sales tax.
[00:23:57.000 --> 00:24:00.520] And I said, well, we're, you know, most of the states haven't started doing this yet.
[00:24:00.520 --> 00:24:02.840] And he's like, well, actually, the states have started.
[00:24:02.840 --> 00:24:04.040] They've figured it out.
[00:24:04.040 --> 00:24:06.440] They're starting to charge sales tax now.
[00:24:06.760 --> 00:24:13.560] I'm like, okay, but okay, well, maybe we can try doing a few things, but we're never going to, you know, remit VAT.
[00:24:13.560 --> 00:24:14.840] That's insane.
[00:24:14.840 --> 00:24:22.520] And he goes, well, you might want to think about it because the risk is fines, number one.
[00:24:22.520 --> 00:24:31.800] And two, if you ever get acquired, a lot of deals fall through if these kinds of liabilities have not been figured out.
[00:24:32.360 --> 00:24:35.160] So that was the initial motivation.
[00:24:35.480 --> 00:24:41.000] And in my head, when I talked to you about this, I was like, well, Stripe has Stripe tax.
[00:24:41.320 --> 00:24:44.680] Surely this has been automated by now.
[00:24:44.680 --> 00:24:44.840] Right.
[00:24:45.200 --> 00:24:46.800] And so, yeah, we looked into it.
[00:24:46.800 --> 00:24:49.200] And yeah, they have Stripe tax.
[00:24:49.200 --> 00:24:52.320] You can turn it on and start collecting sales tax pretty easily.
[00:24:52.320 --> 00:24:54.000] But you still have to remit it on your own.
[00:24:54.000 --> 00:24:54.720] And register.
[00:24:54.880 --> 00:24:58.160] But Stripe also, Stripe also bought Tax Jar.
[00:24:58.160 --> 00:24:58.480] Yeah.
[00:24:58.480 --> 00:25:05.040] So we talked to them and they're like, oh, yeah, we don't automatically remit in anywhere but the U.S.
[00:25:05.360 --> 00:25:05.840] Yeah.
[00:25:06.080 --> 00:25:08.320] So we're like, oh, it doesn't really work.
[00:25:08.320 --> 00:25:09.360] That's not great.
[00:25:09.360 --> 00:25:12.720] Again, this is not a tax on businesses.
[00:25:12.720 --> 00:25:18.480] This is government saying businesses need to collect these taxes on their behalf.
[00:25:18.480 --> 00:25:23.920] And so we're like, just, can we just, is there an API or something that can just figure this shit out?
[00:25:23.920 --> 00:25:31.920] Like, we are a part of Stripe's climate program, carbon, you know, they invest in carbon projects.
[00:25:32.240 --> 00:25:33.680] That's all automated.
[00:25:33.680 --> 00:25:35.600] It's just a percentage of our revenue.
[00:25:35.600 --> 00:25:36.720] They just take it away.
[00:25:36.720 --> 00:25:37.440] We don't see it.
[00:25:37.440 --> 00:25:40.560] We don't know where the, it's like, I mean, even if it was like...
[00:25:40.560 --> 00:25:41.920] There must be something like that.
[00:25:41.920 --> 00:25:44.000] Even if it was like something like the U.S.
[00:25:44.240 --> 00:25:48.480] government was like, all right, we now have a national sales tax on internet sales.
[00:25:48.480 --> 00:25:49.760] It's 5%.
[00:25:50.160 --> 00:25:58.960] And then you send us the money and you send us information on how much money you collected in each like state and we'll just pay it.
[00:25:59.040 --> 00:25:59.840] We'll do it.
[00:25:59.840 --> 00:26:01.760] You just send it once a month or whatever and we'll do it.
[00:26:01.760 --> 00:26:02.080] That's fine.
[00:26:02.160 --> 00:26:02.400] Yeah.
[00:26:02.560 --> 00:26:03.040] Great.
[00:26:03.040 --> 00:26:04.320] Sounds awesome.
[00:26:04.640 --> 00:26:11.920] By the way, even for like local coffee shops and stuff, I used to own a couple snowboard shops.
[00:26:11.920 --> 00:26:21.520] The number one reason small businesses get audited, I think, is sales tax because I have, well, I'll say it, I'll say it this way.
[00:26:21.520 --> 00:26:22.880] I don't know if that's that's correct.
[00:26:22.880 --> 00:26:29.520] Every friend I know whose business has been audited, it's been related to sales tax.
[00:26:29.520 --> 00:26:37.480] And the reason is, let's say, John, you and I start collecting sales tax on behalf of these governments.
[00:26:37.480 --> 00:26:40.760] Well, some of these sales taxes are 20%.
[00:26:41.080 --> 00:26:47.640] So, we're now going to have in our bank account all of this tax money that is actually not ours.
[00:26:47.640 --> 00:26:50.120] We've just collected it on behalf of the governments.
[00:26:50.120 --> 00:27:03.080] And then, on a schedule that's outlined by those governments, either quarterly or you know, biannually or every year or whatever, however, they want it, we then have to remit that to them.
[00:27:03.080 --> 00:27:07.640] Talk about a cash flow headache right there.
[00:27:07.640 --> 00:27:14.600] All of a sudden, we have to be managing how much of this is not our money, how much of this is the government's money.
[00:27:14.600 --> 00:27:18.600] Like, that is bonkers to me.
[00:27:19.240 --> 00:27:24.680] And it's not just like it's not like a flat tax, it's like in the UK, it's 20%.
[00:27:25.000 --> 00:27:38.680] Here's something even crazier: in the UK, if you sell to consumers as opposed to businesses, your prices need to be sales tax inclusive.
[00:27:39.000 --> 00:27:50.440] And so, when I've talked to sales tax compliance experts, their best practice for a business like us is for us to just eat the tax.
[00:27:50.440 --> 00:28:03.400] So, if you charge $100 a month to a customer, instead of showing that customer 20% on top, most businesses just keep their prices the same.
[00:28:03.400 --> 00:28:11.720] Like, our price for whoever it is in the world is $19 a month, $99 a month, but let's just say $100 a month.
[00:28:11.720 --> 00:28:13.880] That's been our price from the beginning, since we launched.
[00:28:13.880 --> 00:28:15.680] We don't want to increase it for people.
[00:28:16.000 --> 00:28:23.840] The advice is for us to just take 20% out of our revenue and send that to the British government.
[00:28:23.840 --> 00:28:25.680] Yeah, that seems crazy.
[00:28:25.680 --> 00:28:27.680] That's the best practice?
[00:28:27.680 --> 00:28:31.440] Founders in Europe, what are you doing?
[00:28:31.760 --> 00:28:33.120] Like, what are you doing?
[00:28:33.120 --> 00:28:41.280] You're giving away 20% of your margin to the government just because that's your money.
[00:28:41.280 --> 00:28:42.000] You know what I mean?
[00:28:42.000 --> 00:28:44.480] Like, this is not a tax on you as a business.
[00:28:44.480 --> 00:28:46.080] It's a tax on the customer.
[00:28:46.080 --> 00:28:46.240] Right.
[00:28:46.240 --> 00:28:50.800] And on top of that, they probably pay income tax if they're based in the UK, right?
[00:28:50.800 --> 00:28:51.280] Yeah.
[00:28:51.920 --> 00:28:52.480] Yeah.
[00:28:52.480 --> 00:29:01.520] And it's, it, it, I just, this whole thing is a train wreck.
[00:29:01.520 --> 00:29:04.000] And so we've tried a few things.
[00:29:04.000 --> 00:29:05.280] So, yeah, when do we?
[00:29:05.360 --> 00:29:07.760] We've been talking to this for a while, I think.
[00:29:07.760 --> 00:29:14.160] Since since the middle or early spring of 2022, we started talking about this.
[00:29:14.160 --> 00:29:17.120] Yeah, I was like, I started getting concerned about it.
[00:29:17.120 --> 00:29:19.120] I talked to you about it.
[00:29:19.120 --> 00:29:24.320] And we were kind of like, okay, well, we want to do the right thing.
[00:29:24.320 --> 00:29:28.160] It's not like we don't want governments to be able to collect taxes.
[00:29:28.160 --> 00:29:30.160] Like, that's fine.
[00:29:30.160 --> 00:29:31.360] Collect your taxes.
[00:29:31.360 --> 00:29:34.400] So, and so, yeah, we looked into Stripe, like you said.
[00:29:34.400 --> 00:29:35.440] We looked into TaxJar.
[00:29:35.440 --> 00:29:37.760] We had calls with TaxJar.
[00:29:37.760 --> 00:29:43.280] Then we talked to, we thought, well, maybe we can just hire some accountants to do this on our behalf.
[00:29:43.280 --> 00:29:46.800] And so we had phone calls with an accounting firm.
[00:29:46.800 --> 00:29:53.760] And they said, well, in terms of automated payments and registration and all that, we don't do that.
[00:29:54.080 --> 00:30:00.680] We recommend you look at, you know, TaxJar or one of these sales tax compliance companies.
[00:29:59.840 --> 00:30:06.040] And they named another one that we'll not name because we're going to say bad things about them.
[00:30:07.320 --> 00:30:10.440] And we're like, okay, well, I guess we got to do some research.
[00:30:10.440 --> 00:30:13.000] So we did more research.
[00:30:13.000 --> 00:30:26.520] And it seemed like the only company that would do automated registration, collection, and remittance on our behalf as a small team of four people was this one company.
[00:30:27.160 --> 00:30:32.200] And so John, bless his heart, called them.
[00:30:32.200 --> 00:30:37.240] I mean, yeah, so I had a call with one of their reps for like an hour and a half.
[00:30:37.240 --> 00:30:39.880] This is before we even signed anything or signed up with them.
[00:30:39.880 --> 00:30:40.840] And it was honestly great.
[00:30:40.840 --> 00:30:42.120] Like it was reassuring.
[00:30:42.120 --> 00:30:43.560] I had a good call with this guy.
[00:30:43.560 --> 00:30:44.120] Yeah.
[00:30:44.120 --> 00:30:46.120] He explained everything that we had to do.
[00:30:46.120 --> 00:31:02.840] And like, you know, it's a lot of stuff, but I don't know if he was a salesperson, but you know, they make you feel good that they're going to be able to take care of all of it for you after you fill out a number of documents and provide like some revenue, you know, proof of revenue in certain places.
[00:31:02.840 --> 00:31:11.000] The promise was we came to them with all of this angst and worry.
[00:31:11.000 --> 00:31:15.320] And the response we got back was, yeah, we're going to take care of all that for you.
[00:31:15.320 --> 00:31:16.760] It's going to be easy.
[00:31:16.760 --> 00:31:21.400] It just, it takes, we onboard you, we do everything, we hold your hand.
[00:31:21.400 --> 00:31:26.280] I mean, I don't think we realized how much it was going to be because people kept saying, whoa, that company is expensive.
[00:31:26.280 --> 00:31:31.160] But we were like, it seemed cheaper than going with something like Paddle.
[00:31:31.160 --> 00:31:31.720] Yep.
[00:31:31.720 --> 00:31:36.200] And less time consuming eventually once everything's ironed out and working and all that.
[00:31:36.200 --> 00:31:40.840] So we did eventually we did eventually sign up in, I think, November.
[00:31:40.840 --> 00:31:41.480] Yes.
[00:31:41.480 --> 00:31:45.280] So we signed up and we're like, all right, all right, the ball's going to start rolling.
[00:31:45.600 --> 00:31:47.040] This will be good.
[00:31:44.520 --> 00:31:47.600] Yes.
[00:31:48.240 --> 00:31:52.800] Then, mysteriously, well, a few things happened.
[00:31:52.800 --> 00:31:55.280] So we sign up in November and we start paying.
[00:31:55.280 --> 00:31:58.880] It's our first payment was.
[00:31:59.200 --> 00:32:01.680] It was like $5,000 or $6,000.
[00:32:02.640 --> 00:32:06.080] We're talking about for a small company, this is a significant amount of money.
[00:32:06.080 --> 00:32:15.440] Our first payment on November 3rd was $8,800, $8,800, almost $9,000.
[00:32:15.760 --> 00:32:17.040] And we're like, okay, well.
[00:32:18.000 --> 00:32:20.000] That's not us paying sales tax to someone.
[00:32:20.000 --> 00:32:22.320] That's just like fees for this company.
[00:32:22.320 --> 00:32:27.520] That's our payment to the sales tax compliance company that's going to help us and make our lives better.
[00:32:27.840 --> 00:32:31.040] So that's our first payment, November 3rd.
[00:32:31.040 --> 00:32:34.000] Then we waited and waited and waited.
[00:32:34.000 --> 00:32:37.040] And it's like, we're like, what's happened?
[00:32:37.120 --> 00:32:38.000] Like, what happens next?
[00:32:38.320 --> 00:32:42.080] Yeah, meanwhile, we're getting charged monthly for services we're not using yet.
[00:32:42.080 --> 00:32:50.720] So I reached out and the person we're supposed to talk to is not there.
[00:32:50.720 --> 00:32:51.840] They're on vacation.
[00:32:52.000 --> 00:32:54.720] Yeah, well, one, the guy that I talked to left the company.
[00:32:54.720 --> 00:32:56.560] Yeah, well, that happened later.
[00:32:56.560 --> 00:33:00.160] So it was like, we signed up right before Thanksgiving, I think.
[00:33:00.160 --> 00:33:00.960] So, okay, sure.
[00:33:00.960 --> 00:33:02.880] Thanksgiving is busy, whatever.
[00:33:02.880 --> 00:33:10.160] Then we contact them at the end of November and say, okay, we're ready.
[00:33:10.160 --> 00:33:13.760] And then we hear nothing.
[00:33:14.080 --> 00:33:16.960] We hear nothing for a week.
[00:33:16.960 --> 00:33:20.560] And then we get an out-of-office reply.
[00:33:20.880 --> 00:33:28.640] And then I sent an email to their general box: Hey, this is December 7th.
[00:33:28.640 --> 00:33:34.600] Hey, this guy's, we got an out-of-office reply, even though we emailed him a week ago.
[00:33:29.840 --> 00:33:35.400] Didn't hear anything.
[00:33:35.720 --> 00:33:43.560] Didn't hear anything until December 20th after I sent two more emails saying, Hey, we've paid you guys a bunch of money.
[00:33:43.560 --> 00:33:45.400] We still have not heard from anybody.
[00:33:45.400 --> 00:33:47.480] Finally, hear back from somebody.
[00:33:47.480 --> 00:33:52.680] They say, Oh, you're going to get somebody, you'll hear back from a colleague right away.
[00:33:54.280 --> 00:33:55.960] This is December 20th.
[00:33:55.960 --> 00:33:59.160] Did not hear back from somebody until January 8th.
[00:33:59.160 --> 00:34:01.480] Yeah, they were on vacation for three weeks, right?
[00:34:01.800 --> 00:34:02.360] Or something.
[00:34:03.320 --> 00:34:07.400] And then, meanwhile, we're like, we're trying to find somebody that can help us.
[00:34:07.400 --> 00:34:10.360] We've paid this company almost $10,000.
[00:34:10.360 --> 00:34:13.800] And we're like, we haven't, nothing has happened.
[00:34:13.800 --> 00:34:17.240] So we contact that original rep that you talked to.
[00:34:17.560 --> 00:34:18.360] Gone.
[00:34:18.360 --> 00:34:20.040] Nobody told us.
[00:34:20.680 --> 00:34:23.720] Our representative is no longer at the company.
[00:34:23.720 --> 00:34:30.600] I tracked him down on LinkedIn and he's like, oh, yeah, we had massive layoffs in December.
[00:34:30.600 --> 00:34:32.680] Like, tons of people got fired.
[00:34:32.680 --> 00:34:34.920] Meanwhile, I think we had an account manager.
[00:34:34.920 --> 00:34:36.280] We just never heard from them.
[00:34:36.280 --> 00:34:38.280] They never reached out and was like, hey, we're here to help.
[00:34:38.280 --> 00:34:39.000] And this and that.
[00:34:39.000 --> 00:34:45.720] We just got like automated emails of like, hey, sign in here and like fill out this document of all this information, which we had questions on.
[00:34:45.720 --> 00:34:47.080] Yeah, we had questions about.
[00:34:47.400 --> 00:34:54.360] Part of that initial money we paid was for this assessment in Illinois.
[00:34:54.360 --> 00:35:01.960] After we signed up, I looked at this and I'm like, it just, Illinois doesn't have sales tax for SaaS.
[00:35:01.960 --> 00:35:06.280] Why do we have to pay $3,500 for this assessment?
[00:35:06.920 --> 00:35:09.400] And nobody's answering.
[00:35:09.400 --> 00:35:10.360] Nobody's answering.
[00:35:10.360 --> 00:35:13.400] They're like, just you've got the assessment call coming up.
[00:35:13.880 --> 00:35:14.840] So we get on this call.
[00:35:15.600 --> 00:35:22.720] He's getting us to download Excel so we can load up their fucking document so we can paste in our transactions.
[00:35:22.720 --> 00:35:26.560] And about an hour in it, I'm like, listen, you guys still haven't answered the question.
[00:35:26.560 --> 00:35:35.280] Why are we even doing this assessment in the first place if Illinois sales tax is not taxable?
[00:35:35.600 --> 00:35:39.280] He said, well, I'm not sure about that.
[00:35:39.280 --> 00:35:40.560] You're not sure about that.
[00:35:40.560 --> 00:35:41.520] You're the expert.
[00:35:41.520 --> 00:35:43.520] You're doing the assessment with us.
[00:35:43.520 --> 00:35:46.240] He's like, and we've been on the call for an hour now.
[00:35:46.240 --> 00:35:48.880] Then he's like, let me check with my colleagues.
[00:35:48.880 --> 00:35:50.080] Checks with his colleagues.
[00:35:50.080 --> 00:35:52.960] I don't think we heard back again for another week or whatever.
[00:35:53.280 --> 00:35:56.160] We have to like keep responding.
[00:35:57.040 --> 00:36:01.840] They say, hey, we need to book another call with somebody, book another call with somebody, get on the call with her.
[00:36:01.840 --> 00:36:04.960] And I'm like, I'm just trying to figure out what's going on here.
[00:36:04.960 --> 00:36:09.280] We were charged $3,500 for an assessment that it looks like we don't need.
[00:36:09.280 --> 00:36:11.040] And I just want a clear answer.
[00:36:11.040 --> 00:36:13.360] And she's like, oh, okay, well, let's check into that.
[00:36:13.360 --> 00:36:16.720] By the way, I figured out that I'm here in Canada.
[00:36:16.720 --> 00:36:18.400] I don't know anything about U.S.
[00:36:18.400 --> 00:36:19.440] tax law or whatever.
[00:36:19.440 --> 00:36:24.800] It took me five minutes of Googling to realize I don't think we need to do this assessment.
[00:36:24.800 --> 00:36:27.120] I don't think we need to pay tax here.
[00:36:27.120 --> 00:36:30.240] These are the experts that we paid $10,000 to know this stuff.
[00:36:30.240 --> 00:36:32.480] So another hour phone call with her.
[00:36:32.480 --> 00:36:36.560] And then she's like, oh, yeah, you don't need to pay this assessment.
[00:36:36.560 --> 00:36:38.400] And now we're going to refund it for you.
[00:36:38.400 --> 00:36:45.680] It's like, so if I had never brought this up, you guys would have just done the assessment and kept our money and wasted all of our time.
[00:36:45.680 --> 00:36:51.760] And meanwhile, like as this is happening, we've been like, we keep getting like the same emails that are like these onboarding emails.
[00:36:51.760 --> 00:36:53.680] It's the same thing, but it's like a different person.
[00:36:53.680 --> 00:36:57.280] We're like ping-ponged around to like different teams that handle different things.
[00:36:57.600 --> 00:36:59.120] It's like, oh, yeah, we don't know about that.
[00:36:59.120 --> 00:37:01.080] We got our other team is like.
[00:37:01.720 --> 00:37:03.800] Yeah, talk to our other team.
[00:37:03.800 --> 00:37:06.200] It's like, you're supposed to be the experts.
[00:37:06.200 --> 00:37:08.760] You're supposed to make this easier for us.
[00:37:08.760 --> 00:37:16.840] And so finally, I got fed up and I just said, I sent them an email saying this is unacceptable.
[00:37:17.160 --> 00:37:25.800] And the thing that actually tipped me over the edge is I said, okay, you've already charged us $3,500 for something we didn't need.
[00:37:26.120 --> 00:37:32.760] I need to know, because they gave us a quote on filing in eight regions.
[00:37:32.920 --> 00:37:52.920] Just so folks at home know, in Stripe Tax, Stripe Tax monitors almost 100 different tax regions in the world where theoretically SaaS companies need to calculate, collect, and remit on behalf of these governments.
[00:37:52.920 --> 00:37:56.600] So there's about 100 regions.
[00:37:56.600 --> 00:38:05.560] This company that we paid $10,000 to, the quote they gave us was only for six or eight regions, I believe.
[00:38:06.200 --> 00:38:14.120] And that was a loan, $500 a month just for kind of like regular maintenance.
[00:38:14.120 --> 00:38:15.320] That's it.
[00:38:15.320 --> 00:38:17.160] Plus the amount we paid up front.
[00:38:17.160 --> 00:38:18.920] So minus the $3,500.
[00:38:18.920 --> 00:38:22.360] So plus this five grand deposit.
[00:38:22.360 --> 00:38:24.600] So I said, how is this going to scale?
[00:38:24.600 --> 00:38:36.760] If it costs us $500 a month for this, but that's only six regions, but theoretically, we will eventually maybe need to be collecting and remitting for 100.
[00:38:36.760 --> 00:38:41.320] I just need to know how are these costs are going to scale?
[00:38:41.320 --> 00:38:52.000] And they all have, all of these places have, you know, X number of invoices per month you get charged for, and then X number of regions, and then they've got this proprietary calculation, and it's all very enterprisey.
[00:38:52.320 --> 00:38:59.920] I said, I just need to know, let's say, 5,000 invoices a month, 55 regions, how much is that going to cost us?
[00:38:59.920 --> 00:39:02.720] And they could not give me an answer.
[00:39:03.040 --> 00:39:07.200] So I think you can all hear how frustrating this is.
[00:39:07.200 --> 00:39:15.840] Here's the problem: it's easy to bellyache about this because it's ridiculous, but we have to decide what we're going to do.
[00:39:15.840 --> 00:39:16.240] Yeah.
[00:39:16.240 --> 00:39:19.920] Yeah, I mean, it has consequences either way we do it.
[00:39:19.920 --> 00:39:23.040] It has consequences no matter how we do it.
[00:39:23.040 --> 00:39:32.000] Now, am I, do I really think the countries in the EU are going to go after small SaaS companies and levy fines against them?
[00:39:32.000 --> 00:39:32.960] Probably not.
[00:39:32.960 --> 00:39:36.880] Like, that's it's probably not a big concern.
[00:39:36.880 --> 00:39:38.560] But we want to do the right thing.
[00:39:38.560 --> 00:39:40.080] That's our inclination.
[00:39:40.080 --> 00:39:52.560] We want to do the right thing, but nobody's making this any, even if it was like we're not opposed to difficult work either.
[00:39:52.560 --> 00:40:03.040] We're also not opposed to paying, even though I think it's ridiculous that we have to incur costs so the government can collect and remit their own, collect their own taxes.
[00:40:03.040 --> 00:40:10.480] If it was as easy as just like, we're going to sign up and there's going to be a monthly fee for us, it's going to cost us more in accounting.
[00:40:10.480 --> 00:40:11.920] We get all that.
[00:40:11.920 --> 00:40:14.560] But this is a problem for John and I.
[00:40:14.560 --> 00:40:23.760] I think that's frustrating because really, this is the first time we've hit something where you and I could not just make progress.
[00:40:23.760 --> 00:40:24.160] Right.
[00:40:24.160 --> 00:40:32.200] And it's, yeah, it's something we get really frustrated thinking about and talking about, and then we just like don't talk about it because it's so annoying.
[00:40:29.440 --> 00:40:35.320] And we're like, we want to actually do things that help our customers.
[00:40:29.600 --> 00:40:36.600] We want to build things for our customers.
[00:40:36.840 --> 00:40:40.440] And every time we think about it, it's just like, oh, God, this is such a headache.
[00:40:40.440 --> 00:40:47.400] First of all, the other thing about merchants of record is because they're the merchant of record, they've exceeded the threshold in every tax region.
[00:40:47.400 --> 00:40:52.680] So you automatically just have to start remitting taxes for every tax region in the world.
[00:40:52.680 --> 00:40:58.840] So automatically, it's more for your customers and theoretically more for you.
[00:40:59.080 --> 00:41:08.760] The additional cost to switching to something like Paddle and the additional cost of having the additional accounting we would need and all that stuff, we could easily hire one person.
[00:41:08.760 --> 00:41:13.640] I bet you we could even hire easily one full-time person.
[00:41:13.640 --> 00:41:14.360] Probably.
[00:41:14.360 --> 00:41:21.480] With the money, the extra money it would take for us to be compliant.
[00:41:21.480 --> 00:41:29.080] That doesn't even count how much, how many hours we're wasting doing all these calls, trying to figure this out.
[00:41:29.080 --> 00:41:30.600] And we still haven't made any progress.
[00:41:31.000 --> 00:41:35.160] We've wasted thousands of dollars in productive time.
[00:41:35.320 --> 00:41:37.880] We're in the same spot we were at last year in April.
[00:41:38.040 --> 00:41:38.680] Last year.
[00:41:40.360 --> 00:41:43.000] We're just more jaded and more angry now.
[00:41:43.480 --> 00:41:47.240] Yeah, I think at one point we were starting getting emails from this company we signed up for.
[00:41:47.240 --> 00:41:49.560] Like they were the same emails to do the same thing over again.
[00:41:49.560 --> 00:41:54.440] And I was like, this is literally making me think I'm crazy because didn't we do this?
[00:41:54.440 --> 00:41:56.040] Or it's like a different person?
[00:41:56.040 --> 00:41:56.840] I don't.
[00:41:56.840 --> 00:41:57.400] Yeah.
[00:41:57.400 --> 00:41:57.880] Yeah.
[00:41:57.880 --> 00:41:59.960] It's so silly.
[00:41:59.960 --> 00:42:19.040] And if governments truly care about entrepreneurship, like small companies risking their time, energy, and capital to creating value in the world, if they truly cared about that, you got to take this off our plate somehow or make it easier somehow.
[00:42:19.040 --> 00:42:20.720] Yeah, they say they do, but they don't.
[00:42:20.720 --> 00:42:24.720] I mean, they would also do universal healthcare in the U.S.
[00:42:24.800 --> 00:42:30.320] So we won't have to worry about this shit and like how your health insurance is tied to a job and you can't start your own business.
[00:42:30.320 --> 00:42:33.840] This, by the way, is why business is political.
[00:42:33.840 --> 00:42:52.720] Like just having healthcare for entrepreneurs and small businesses, by the way, like healthcare for you and Jason, our two American employees, is still a nightmare compared to how easy it is for Helen and I because it's just covered.
[00:42:53.360 --> 00:42:58.640] Anyway, so folks, that's our rant on sales tax.
[00:42:58.880 --> 00:43:01.200] We still don't really know what we're going to do.
[00:43:02.000 --> 00:43:14.240] We're talking to, there's other companies that do this that are similar to TaxJar, that are cheaper, that remit in more areas.
[00:43:14.560 --> 00:43:31.440] It's still not, it's still incredibly difficult because the advice, we basically have to query their API and then give our EU customers a specific price when they sign up and then somehow collect that.
[00:43:31.440 --> 00:43:36.640] But then if we query their API, Stripe doesn't allow us to mark that as sales tax.
[00:43:36.640 --> 00:43:38.800] We have to just add it to the overall amount.
[00:43:38.800 --> 00:43:44.000] So then it just becomes this overall revenue in our account that we have to track somehow and then remit.
[00:43:44.000 --> 00:43:44.960] And it's like...
[00:43:45.120 --> 00:43:50.800] I mean, we could at some point actually turn Stripe tax collection on.
[00:43:50.800 --> 00:43:51.360] Yeah.
[00:43:51.360 --> 00:43:55.440] That still doesn't help us remit it and pay it, right?
[00:43:55.480 --> 00:43:59.880] Like, and on top of that, we're paying fees to Stripe for collecting sales tax.
[00:43:59.440 --> 00:44:02.920] Stripe tax is not cheap.
[00:44:03.240 --> 00:44:12.760] And like, I mean, you know, in some hopeful scenario, Stripe tax actually turns into something that does it for us, but it doesn't sound like that's happening.
[00:44:12.760 --> 00:44:29.160] Yeah, and honestly, like, again, if I was the Canadian government, if I was the Saskatchewan government, but Saskatchewan, Saskatchewan, Saskatchewan's come up a few times from friends of the show who are actually collecting and remitting tax.
[00:44:29.160 --> 00:44:40.040] Saskatchewan, as soon as you have one transaction in Saskatchewan, you need to register with their on their government website for sales tax and remit sales tax.
[00:44:40.040 --> 00:44:46.840] So Transistor, you know, we big company, not big company, but you know, we've got thousands of customers.
[00:44:46.840 --> 00:44:49.480] We have a handful of customers in Saskatchewan, if that.
[00:44:49.720 --> 00:44:52.600] Like, we don't have an accounting department and a tax and collect department.
[00:44:52.600 --> 00:44:54.040] Like bigger companies, I'm sure they do.
[00:44:54.040 --> 00:44:59.880] And it's just a cost of doing business for them, which I guess it would be for us too, but it's like.
[00:45:01.080 --> 00:45:11.400] You're going to make every small business in the world doing this kind of work, every e-commerce company, every software company, anybody selling anything digital, consulting over the border, anything.
[00:45:11.400 --> 00:45:19.800] You're going to make every single one of those companies, as soon as they charge their customer $50 for a digital download or whatever it is.
[00:45:19.800 --> 00:45:26.280] And so the tax, you know, that's whatever, that's $5 sales tax to Saskatchewan.
[00:45:26.600 --> 00:45:34.120] You're going to make those companies do all of that work for you so that you can get $5 in tax revenue.
[00:45:34.120 --> 00:45:34.680] Right.
[00:45:35.080 --> 00:45:36.680] That's the plan.
[00:45:37.640 --> 00:45:43.160] Here's an idea, Saskatchewan, and every other government official and tax.
[00:45:43.160 --> 00:45:46.800] So if you're listening, by the way, and I want to hear from you.
[00:45:44.600 --> 00:45:49.760] If you are with a government that collects sales tax, I want to hear from you.
[00:45:44.680 --> 00:45:51.040] I don't want you to come and arrest me.
[00:45:51.200 --> 00:45:53.360] I just want you to email me.
[00:45:53.360 --> 00:45:55.680] Go to Stripe directly.
[00:45:56.000 --> 00:46:01.440] Just go to Stripe and say, hey, you guys already know where everybody lives.
[00:46:01.440 --> 00:46:03.760] You already know all the revenue numbers.
[00:46:03.760 --> 00:46:11.520] You've already even enabled people to turn on Stripe Climate automatically and just automatically have revenue go places.
[00:46:11.840 --> 00:46:18.000] Just do this for every country, region, state, province, city.
[00:46:18.000 --> 00:46:23.280] I'm looking at you, Chicago, that wants to collect sales tax on SaaS.
[00:46:23.280 --> 00:46:23.920] Great.
[00:46:23.920 --> 00:46:25.120] Do it.
[00:46:25.120 --> 00:46:27.840] Just don't make every small business do it.
[00:46:27.840 --> 00:46:28.800] Go to Stripe.
[00:46:28.800 --> 00:46:30.800] Get them to do it for you.
[00:46:30.800 --> 00:46:32.480] Way easier.
[00:46:32.480 --> 00:46:52.960] And honestly, you will make so much more money than now instead of having millions of companies registering on your crummy government website, you just need to make one deal with Stripe and you're done for the vast majority of e-commerce, SaaS, et cetera.
[00:46:52.960 --> 00:46:55.520] That's the advice.
[00:46:55.840 --> 00:46:58.000] And we don't know what we're going to do.
[00:46:58.000 --> 00:47:00.400] I'd love to hear what people are doing.
[00:47:00.720 --> 00:47:02.640] John, I think we've said enough.
[00:47:02.640 --> 00:47:03.680] I think we have.
[00:47:04.000 --> 00:47:06.800] You want to thank our Patreons.
[00:47:06.800 --> 00:47:10.800] We've got our nice Patreon page that we can now read from.
[00:47:10.800 --> 00:47:11.760] It's just automatic.
[00:47:11.760 --> 00:47:13.840] We know who's a current supporter.
[00:47:13.840 --> 00:47:16.080] 17 people who have stuck with us.
[00:47:16.080 --> 00:47:16.800] Who are they?
[00:47:16.800 --> 00:47:19.360] Thanks to everyone who's stuck with us through all this.
[00:47:19.760 --> 00:47:23.760] We've got Mitchell Davis from recruitkit.com.au.
[00:47:23.760 --> 00:47:26.960] Marcel Fale from WeAreBold.af.
[00:47:26.960 --> 00:47:40.440] Ole Kulik, Ethan Gunderson, Anthon Zorin from Prodcamp.com, Bill Kondo, Alex Payne, Ward from memberspace.com, Russell Brown from Fotivo.com.
[00:47:40.440 --> 00:47:41.080] That's right.
[00:47:41.080 --> 00:47:48.120] Evandra Sassi, Austin Lovelace, Michael Sitber, Fathom Analytics signed up again, I think.
[00:47:48.120 --> 00:47:49.160] Re-signed up.
[00:47:49.160 --> 00:47:49.480] Yeah.
[00:47:49.480 --> 00:47:49.960] Yep.
[00:47:51.400 --> 00:47:52.680] That's Jack and Paul.
[00:47:52.680 --> 00:47:53.160] Yep.
[00:47:53.160 --> 00:47:54.040] Gray guys.
[00:47:54.200 --> 00:47:55.720] My brother Dan Buddha.
[00:47:55.720 --> 00:47:59.480] Colin Gray, Darby Frey, and Dave Junta.
[00:47:59.480 --> 00:48:01.240] Junta.
[00:48:01.880 --> 00:48:03.240] How come Dave shows up at the end?
[00:48:03.240 --> 00:48:05.080] Because he's the longest supporter?
[00:48:05.080 --> 00:48:05.880] I think so.
[00:48:05.880 --> 00:48:06.280] Damn.
[00:48:06.280 --> 00:48:09.480] I wonder if he feels like he could just never cancel this subscription.
[00:48:09.480 --> 00:48:09.960] I don't know.
[00:48:09.960 --> 00:48:11.240] I should ask him.
[00:48:12.520 --> 00:48:21.400] Tell Dave that no matter what, even if he cancels, he is an honorary, he will get shouted out every episode.
[00:48:21.400 --> 00:48:23.480] Friends, thanks so much for listening.
[00:48:23.480 --> 00:48:25.000] We will see you again soon.
[00:48:25.000 --> 00:48:27.080] We're going to put it on the calendar.
[00:48:27.080 --> 00:48:28.840] Tell your friends.
[00:48:28.840 --> 00:48:31.720] And yeah, we'll see you next time we record.
[00:48:47.480 --> 00:48:48.360] Saskatchewan?
[00:48:48.360 --> 00:48:49.400] Saskatchewan.
[00:48:49.400 --> 00:48:50.440] Saskatchewan.
[00:48:50.440 --> 00:48:51.080] Saskatchewan?
[00:48:51.240 --> 00:48:52.120] Saskatchewan.
[00:48:52.120 --> 00:48:52.840] Saskatchewan.
[00:48:52.840 --> 00:48:53.560] Saskatchewan.
[00:48:53.560 --> 00:48:54.600] To Saskatchewan.
[00:48:54.600 --> 00:48:55.960] Saskatchewan.
[00:48:56.920 --> 00:48:59.160] Saskatchewan.
[00:49:01.080 --> 00:49:03.160] Saskatchewan.
[00:49:05.400 --> 00:49:07.160] Saskatchewan.
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