Quote from: libcoin on April 19, 2012, 10:14:07 AM

Digital currencies like bitcoin are, for a very near analogy to a gift card or a group on voucher. You buy your proof of value and then later you use it in a store that accepts it.

I think the key words are "closed loop" and "open loop".

The Forbes article describes how if there is a $50 Groupon offer to buy something normally sold at $100, the store must charge sales tax (in most states) on the $100, and then apply the $50 as payment towards that balance. We all know that is bunk because the only reason we bought it is because the was much less than the $100, so really only $50 of commerce happened.

If I understand the article correctly, the desire is to get rid of that and treat the $50 sale as a $50 sale. But then the states want the time of the sale to occur immediately, when the $50 payment to Groupon happens, and not later at the purchase at the store.

Bitcoin is not a closed loop. It is accepted globally for any number of uses. There is no way the state knows that the bitcoins are going to be used for a taxable purchase or used for a purchase within that state even.

What this myriad of rules means though is that just to comply a company like Groupon has to have a team of tax specialists. Here's a listing:

Quote

Key responsibilities will include coding for tax engine to ensure tax accuracy. Researching the taxability of goods, services, and vouchers sold by Groupon. Working with outside sales tax compliance firm relative to coordinating domestic sales tax compliance. Review and file monthly sales tax returns, create and maintain sales and use tax files for purposes of audit, and lead sales tax audit defense efforts. Creation and maintenance of a process for the review of procurement activity to ensure the proper payment of tax.

- http://www.linkedin.com/jobs/jobs-Sales--Use-2867622

Some day a marketing company is going to figure out that Bitcoin has properties that solve a lot of problems.

For instance, this groupon thing. Maybe there is a groupon competitor to come along that doesn't charge the customer, and instead simply charges a deposit (paid in bitcions) to reserve the deal from the retailer. If the customer follows through with the purchase as agreed, the bitcoin deposit is returned. If not, the fee is allocated partially to the groupon competitor and the balance to the retailer. No sales tax mess.

In the mean time these companies just can't seem to think out of the VIsa/MC/Amex and PayPal box. When will the first bitcoin-powered category killer arrive, I have no idea -- but there certainly is the potential for something like this to happen.