Sales Tax ??

[Johnus]

I ordered and downloaded last night; no problem as usual. But I was charged sales tax. I don't think I ever paid sales tax on a Matrix digital download purchase. I am a New York State resident.

What gives ??

[E]

Good question. 

[JudgeDredd]

They introduced Sales Tax in New York due to the "financial depression" [;)]

[E]

The question regarding out of state sales tax remains.

[Aurelian]

I didn't pay any here in PA. Of course that could change. (Philadelphia just got to raise the tax to 8% while the rest of the state is 6%. They say it's temporary.......)

[JudgeDredd]

I was only jesting E - forgot the smiley...added now [:D]

[Erik Rutins]

Unfortunately, some recent tax law changes in certain states (where they no longer accept an out of state resell certificate) required DR to start charging sales tax outside of Minnesota (where they are based), even on digital downloads. I believe they now have to charge in 11 states. Charging in NY was necessary due to a new affiliate law that NY passed. Sadly, the US seems to be catching up to Europe in this area.

[ool]

They said the same thing about taxes period when they were first introduced. Lesson in all this? Never give a politician of any party access to your wallet. They never take their hands out of your pockets!

[Phatguy]

ORIGINAL: JudgeDredd

They introduced Sales Tax in New York due to the "financial depression" [;)]

Dontcha know? New York bankers need extra funds. I mean, how can they be expected to pay for their yachts and jets on a measly 20million bonus.......

[Fallschirmjager]

TN must one of those states. I am surprised the state legislature even knows what the internet is much less that it is a source of commerce and must be taxed.
I was charged tax for a Matrix game for the first time for WitP AE and was surprised.

[killroyishere]

Well that means buying everything from ebay and used Amazon.com for me then. god I want to cuss outloud about this F N G GD MFing G.

[jackx]

If it can be taxed, even the most ignorant politician will inevitably be aware of it.

I'm bracing myself for the tax increase after the election right now, you should count yourselves lucky - at 8% (or there about), you have a lot of catching up still left to do before you even come close to Europe.

[bigmilt]

That's why overstock and amazon dropped all their ny affiliates - so they wouldn't have to charge tax.

[harley]

FWIW we have a GST in Australia, set at 10%. Our states do not have the constitutional right to levy taxes, the feds have to do it, and pass the money on.

What's good about it, though, is that imports are only taxed if the GST would be over $100, so we can buy up to $1000 stuff from over-seas without tax. Yay!

[killroyishere]

I did some sales checks on Amazon this morning and thankfully no taxes were added to any of my orders. So maybe Matrix can put some of their games up on Amazon.com? [:D] I also wish they would move to Gamers Gate for direct download instead of Digital River. I don't get charged any tax there either.

[Erik Rutins]

ORIGINAL: killroyishere
I did some sales checks on Amazon this morning and thankfully no taxes were added to any of my orders. So maybe Matrix can put some of their games up on Amazon.com? [:D] I also wish they would move to Gamers Gate for direct download instead of Digital River. I don't get charged any tax there either.

Gamersgate is owned by another publisher (Paradox) who are in Europe, they are also download-onlly. Digital River is a third party company that any publisher can theoretically use, though we were the first and pioneered the whole physical on demand system and taught them about game publishing. It's been a long term relationship that works better than the other alternatives we've explored, but we are re-evaluating it fairly regularly to make sure that we have the best solution for our customers and developers.

[brianlala]

It still doesn't sound like DR or Matrix has a nexus in New York. The whole point of companies like Amazon dropping their NY affiliates was to avoid having a nexus in that state because without a nexus in a state then that state cannot legally collect state taxes from the entity. Does DR have some sort of nexus in NY?

If DR doesn't have a nexus in NY then I believe it would only be "voluntarily" collecting the sales tax on behalf of NY customers rather than being obliged to do it. In this case, it wouldn't be a nice thing for DR to do considering that customers could just as easily be paying "use" tax instead of sales tax...and as we all know, NOBODY pays use taxes on their internet purchases and neither have I ever heard of a state going after somebody for failure to pay use taxes.

How to collect use taxes and/or force out-of-state businesses to collect another state's sales tax is all being debated in the Streamlined Sales Tax Project but it is highly unlikely that states will come to a consensus. Nevertheless, to get back to my original point, if DR does not have a nexus in NY then it should not be collecting sales tax from NY and remitting it to NY. That is just a disservice to its customers. Let the customer decide whether to pay the use tax or not.

[wworld7]

ORIGINAL: brianlala
In this case, it wouldn't be a nice thing for DR to do considering that customers could just as easily be paying "use" tax instead of sales tax...and as we all know, NOBODY pays use taxes on their internet purchases and neither have I ever heard of a state going after somebody for failure to pay use taxes.

In the past many states have gone after only big ticket items (cars, art work, etc...). This is changing now and many states are going after every possible dollar they can find.

ORIGINAL: brianlala
Nevertheless, to get back to my original point, if DR does not have a nexus in NY then it should not be collecting sales tax from NY and remitting it to NY. That is just a disservice to its customers. Let the customer decide whether to pay the use tax or not.

Let the customer decide was the "old way" things worked or actually DIDN'T work well

I do not want to disagree with you, but I am not so sure DR has any choice but to collect the tax. I find it hard to imagine they would do so if they were not obligated by law.

[brianlala]

Hi Flipper,

Cars are a completely different discussion and are extremely easy to track due to the necessity to register them in each state. The whole gist of my argument is that if DR has no nexus (i.e. No physical presence) in New York then there is absolutely nothing that New York state can do to force DR to collect NY state sales tax. If DR does have some sort of presence in NY then, absolutely, NY legally can force DR to collect sales tax on sales in that state. This is precisely why Amazon was forced to drop its affiliate marketers in NY this year. NY argued that since some of these affiliate website owners resided in NY, then this created a nexus in NY for Amazon.

Amazon, faced with either: 1) putting itself at a competitive disadvantage to some of its rivals by being forced to charge NY state sales taxes or 2) dropping the extra sales that came in through its affiliates, chose #2 and said bye-bye to its NY affiliates. This is why, I believe, Amazon does not charge sales tax in NY yet.

http://www.taxfoundation.org/news/show/25120.html

I agree that legislatively many states are "going after every possible dollar they can find" but I can guarantee there will never be a situation where citizens not paying use taxes for small-ticket online purchases will be charged with tax fraud. It's simply completely unenforceable and trying to force online companies to collect sales tax for a state they have no nexus in will also be unenforceable because it is unconstitutional and/or no sales tax states have ZERO incentive to go along with something like the Streamlined Sales Tax Project.

Once again, if DR has a nexus in NY then they ARE obligated by law to collect NY sales tax. Otherwise, no way, no how are they obligated by law to collect sales tax and they are doing it by choice (which the law does not forbid as long as the sales tax revenues are distributed properly).

[E]

Here's the official automated Digital River response to this issue...
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Thank you for contacting The Online Store Customer Service Team.

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It seems the in-state presence is no longer the crux of the out-of-state sales tax charging issue for Digital River.