Stripe announced the launch of “Tax for Platforms” to enable platforms operating on Stripe Connect to offer their users the Stripe Tax feature, ensuring seamless tax compliance.
Stripe’s new offering seeks to address a fundamental issue experienced by small business owners: the overwhelming complexity of global tax regulations. Michael Carney, the product lead for Stripe Tax, remarked, “Help with sales tax and VAT has been our platform users’ most commonly requested feature. We built Stripe Tax to extend the payment processing domain, and the evolution to ‘Tax for Platforms’ allows our partners to provide comprehensive transaction support to their users.”
What This Means for Small Business Owners
Introducing “Tax for Platforms” can be a game-changer for the millions of businesses anchored on platforms like Mindbody, Squarespace, and WooCommerce. These platforms cover various industries and are foundational to the online economy. The latest offering from Stripe will simplify cross-border sales by presenting a no-code remedy for intricate tax stipulations that arise with global trade.
Historically, while platforms facilitated payment processing for their users via Connect, they were ill-equipped to provide tools for tax compliance on those transactions. Businesses were left navigating the labyrinthine corridors of tax compliance, exposing them to penalties and extra costs from possible missteps. Given the frequent fluctuations in tax rules — the US alone witnessed over 600 rule changes in sales tax in the previous year — the complexities of managing tax obligations are clear. A recent survey by Stripe pinpointed tax complications as the primary barrier for 18% of businesses contemplating global expansion.
Stripe Tax, introduced in 2021, has already made inroads in simplifying this process. It automatically calculates sales tax, VAT, and GST across 40 countries and every US state. Apart from the calculations, it also accelerates the tax filing process with its automated reports tailored to each jurisdiction. The growing popularity of Stripe Tax is evident, with its user base tripling in the past year. However, until now, its benefits were restricted to direct Stripe users.
The newly launched “Tax for Platforms” empowers platforms to extend these benefits to their clientele, streamlining tax compliance and offering a unified solution that could lead to new revenue streams.
A Boost to Platform-Centric Services
Platforms that bolster their services with comprehensive support tools are enhancing their product appeal and fostering their users’ economic success. Thinkific, an illustrative example, is a platform that equips creators with resources to design, market, and monetize online education. Peter Fitzpatrick, VP of commerce at Thinkific, said, “We kept hearing from our creators that they were struggling with taxes. They’re selling digital goods all over the country and the world. Keeping up with the different tax laws is nearly impossible. With Stripe Tax, we’ll be able to offer a solution that automates tax calculation and collection on transactions for our creators, so they can spend less time on taxes and more time growing their business,”
For the creator community, this innovation is a welcome relief. As one creator on Thinkific aptly summarized, “We don’t even have to think about tax—it’s an entrepreneur’s dream.”
“Tax for Platforms” is now accessible in all countries supported by Connect and Tax. Platforms looking to offer this benefit to their users can find more details through Stripe’s official channels.
Furthermore, Stripe’s suite of offerings doesn’t end at tax compliance. Platforms can seamlessly integrate many other Stripe services like Stripe Terminal for POS payments, Stripe Issuing for payment card management, Stripe Billing for managing recurring revenue, and more, offering holistic solutions tailored for the modern business landscape.
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Image: Stripe
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