Every so often, the topic of tax comes up on our mailing-list. People wonder why Kill Bill doesn’t have a built-in tax module and how existing users have worked around it. We actually know some companies have implemented their own tax plugin. While this approach may work if you have very few jurisdictions to worry about and a limited product catalog, for the vast majority of cases, we recommend simply outsourcing your tax calculations altogether: in practice, determining your tax assessment is a really hard problem.

Case in point: the New York State imposes sales tax on sandwiches of every kind that are prepared and ready to be eaten. But what is considered a sandwich? A sandwich can be as simple as a buttered bagel or roll, or as elaborate as a six-foot, toasted submarine sandwich [sic] (Tax Bulletin ST-835). Surprisingly, this includes burritos (but not tacos!). And if you ask your plain bagel to be sliced, it’d cost 8.875% more as sales tax would apply on a grocery item which has just become a sandwich.

NPR’s Planet Money ran a great story on the topic last year (Episode 554: How The Burrito Became A Sandwich): do check it out for a fun history of the sales tax and incredible anecdotes, including how a pizza place rebranded itself as a bakery and how a food delivery service started serving unassembled wraps, both just to avoid paying taxes.

Granted, these edge cases may seem remote if you are running an e-commerce, but local tax laws could impact your business nonetheless (think about the VAT 2015 changes we just went through). To calculate taxes, you have to take into account the customer (who may be exempt in some jurisdictions), the product (is it fully taxable, half-taxable, etc.) and the transaction itself (depending on the address, state and county taxes may be applicable). Applying the right amount of tax for each invoice item and remaining compliant is truly complicated: that’s the reason why we decided not to write any tax module in Kill Bill. Instead, we provide turn-key integrations with third-party solutions.

One such third-party is Avalara AvaTax, which have shared with us a great Sales & Use Tax compliance For Dummies e-book: it goes into details over the sales tax landscape, filings, audits and compliance solutions. And if you want to integrate AvaTax with Kill Bill, make sure to check-out our plugin.