Sales Tax ??

[wworld7]

Brianlala,

I understood your view in your post and you were correct on the nexus issue.

I do not know where the nexus in NY is located.

Be well,

[Johnus]

Erik:

Never had a problem with a Matrix download; or with Digital River. If, however, they are charging sales tax they are not obligated to, that is a MAJOR problem. The tax added over $4.00 to my $49.99 purchase. Four dollars doesn't sound like much, but I buy a lot of Matrix games; and if it is not legally required, it would anger me each time I made a purchase.

Also Digital River doesn't list New York as one of the locations where sales tax is necessary.

Finally, if Digital River is paying sales taxes where same are not necessary, some authority from New York State will track the responsible persons down and have them committed. On the other hand if they are collecting sales taxes and not remitting same to the State of New York, the responsible persons will find themselves subject to another form of confinement.

[Erik Rutins]

Johnnie,

ORIGINAL: Johnnie
Never had a problem with a Matrix download; or with Digital River. If, however, they are charging sales tax they are not obligated to, that is a MAJOR problem. The tax added over $4.00 to my $49.99 purchase. Four dollars doesn't sound like much, but I buy a lot of Matrix games; and if it is not legally required, it would anger me each time I made a purchase.

Let me nip this in the bud - they are charging it because they are obligated to. This just changed, I got the e-mail about it a few days ago. Apparently they do have a tax "nexus" in NY.

Regards,

- Erik

[Fallschirmjager]

Weird. I do not see Tennessee mentioned. But I have been charged tax on this game and back in August with AE.
Not that I care too deeply. It has been around $10 and quite frankly the state needs the money. But I wonder where and when the law changed that lets TN residents start being taxed.

[Johnus]

Brianlala and Flipper:

If Digital River has a nexus in NY but Matrix does not, is Digital River still required to collect the tax ??  I'm just asking. I know nothing about these laws.

[TechSgt]

ORIGINAL: 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.

Fall;

Don't you-all remember? Al Gore invented the internet! [:D]

TS

[Fallschirmjager]

ORIGINAL: TechSgt

ORIGINAL: 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.

Fall;

Don't you-all remember? Al Gore invented the internet! [:D]

TS

No Al Gore jokes
He is a state icon and I worked on his campaign in 2000 [;)]

[brianlala]

"Brianlala and Flipper:

If Digital River has a nexus in NY but Matrix does not, is Digital River still required to collect the tax ??  I'm just asking. I know nothing about these laws."

I don't know how DR and Matrix are set up as companies and what level of independence they have from each other. Either way, Erik answered the question with crystal clarity by stating that DR does have a physical presence/nexus in NY so all other points are null and void.

This sales tax issue is why, for instance, a company like New Egg charges sales tax in California (where they have their warehouses and thus a nexus) but not in most other states (where they have no nexus). In these no-nexus states, the consumer is required to remit the use tax to their taxing authority if the state has a use tax.

I have no idea why this conversation sparked me except that it was bringing back memories to my public finance PhD days. That's all from me here.

[Fallschirmjager]

ORIGINAL: brianlala

"Brianlala and Flipper:

If Digital River has a nexus in NY but Matrix does not, is Digital River still required to collect the tax ??  I'm just asking. I know nothing about these laws."

I don't know how DR and Matrix are set up as companies and what level of independence they have from each other. Either way, Erik answered the question with crystal clarity by stating that DR does have a physical presence/nexus in NY so all other points are null and void.

This sales tax issue is why, for instance, a company like New Egg charges sales tax in California (where they have their warehouses and thus a nexus) but not in most other states (where they have no nexus). In these no-nexus states, the consumer is required to remit the use tax to their taxing authority if the state has a use tax.

I have no idea why this conversation sparked me except that it was bringing back memories to my public finance PhD days. That's all from me here.

New Egg also started charging me sales tax several years ago so I switched to ZipZoomFly for some of my hardware needs. They are still sales tax free.

[bigmilt]

They will collect tax if either matrix or dr has a nexus in new york state. I am in and do the sales tax interface with the company that provides our
sales tax software. New York has stretched the meaning of nexus to the breaking point - if you have a customer in new york state and visit them on
business that will constitute a nexus for them.

[htuna]

Didn't see Massachusetts listed.. and Mass doesn't get charged by NewEgg or Amazon... 

[Erik Rutins]

That previously posted "official" reply from DR is out of date as far as I can tell. I've asked them to update it.

Here's the info I have:

Q - What states do we now charge sales tax?
A DR had MN, CA, WA and added DC, MA, TN, CT, Fl., MS, HI, MD, and NY

Some additional info:

Q- What creates nexus in a state?
A – Historically it is having property or employees in a state however states are coming more aggressive with new reasons to claim nexus i.e. affiliates and customer service activates

Q - Why are we expanding our nexus to states in which we do not have property or people?
A –Since DR acts as a reseller for our clients they need a resell certificate from DR to avoid having to charge DR sales tax. Most states accept an out of state resell certificate i.e. from MN. These new nexus states do not. DR needs to be able to provide 50 states resell certificates to our clients

Q – Can we expect expanding our nexus to additional states in the future?
A – Yes, States are thinking about passing laws that would expand their tax net to include out of state internet sellers. IL is expected to be added

[Fallschirmjager]

Gone are the days of the wild west internet where you could order freely and not pay sales tax. But it always was a 'loophole' that is just not being closed after more than 15 years.
And people say our goverment is capable of vast conspiracies [:D]