What API and data model would support a new Tax workflow for marketplaces

Problem Statement Description

Product context: Stripe is financial infrastructure for internet businesses; its products include payments, Checkout, Billing, Connect, Radar, Issuing, Terminal, and tax tools.

Stripe is exploring a new Tax workflow for marketplaces: platforms that facilitate transactions between buyers and many third-party sellers, often across jurisdictions, product categories, and tax obligations. The interview asks you to define the API and data model that would let a marketplace calculate, collect, report, and reconcile tax in a way that fits naturally into Stripe’s payment and platform workflows.

Focus on the concrete developer and operator experience. A marketplace may need to represent buyers, sellers, products, locations, exemptions, fees, refunds, disputes, and tax registrations while keeping checkout fast, compliant, and auditable. The design should account for marketplaces that are the merchant of record, marketplaces where sellers are responsible for tax, and hybrid models where responsibility varies by country, state, product, or transaction type.

This is a technical PM question, so your response should translate product requirements into platform primitives: API surfaces, core objects, relationships, lifecycle states, data ownership, integration paths, and operational safeguards. You are not expected to write production code, but you should be precise enough that engineering, legal/compliance, and developer-facing teams could react to the proposal.

The experience should consider:

- The primary users: marketplace developers, platform operations teams, sellers, buyers, finance teams, and tax/compliance stakeholders.

- The transaction workflow from tax calculation before payment through collection, settlement, reporting, refunds, and corrections.

- The API objects and data model needed to represent marketplace parties, taxable items, addresses, tax registrations, exemptions, and liability assignment.

- How the design handles global complexity, including jurisdiction-specific rules, seller nexus, digital versus physical goods, platform fees, and cross-border transactions.

- Reliability and correctness expectations for a financial infrastructure API, including idempotency, versioning, auditability, error handling, and reconciliation.

- Privacy and security considerations for sensitive buyer, seller, location, and tax identity data.

- Rollout and migration paths for existing Stripe marketplace integrations, including backward compatibility and incremental adoption.

- Observability and support needs, such as logs, explainability of tax decisions, dispute investigation, and developer debugging.

The goal is to evaluate how you structure a complex platform design problem, identify the right abstractions, balance developer simplicity with compliance depth, and define an API/data model that could support marketplace tax workflows at Stripe scale without prescribing a single implementation upfront.