07-18-2012, 11:29 AM | #1 |
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ebooks and sales tax from the WSJ
http://www.teleread.com/paul-biba/sa...is-heating-up/
I simply could not find a link to the WSJ article, what appears above is another article from a different site called teletread, and it is not clear that even if I gave one forum members would be able to see it so I am providing my own summary of the article in the Wall Street Journal. For many years shoppers have been able to go online and buy anything sales tax free, well that is changing due to states imposing sales taxes on good purchased over the internet and brought into their state. Some states remain exempt from sales taxes including New York, Florida and Washingtion DC. May customers of electronic books can look foward to paying sales taxes on the boks that we read and buy over the internet. Last edited by jbcohen; 07-19-2012 at 07:27 AM. |
07-18-2012, 11:39 AM | #2 |
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I pay sales tax on every ebook I buy for my Nook from B&N. I don't on things I buy from Amazon that I have shipped. I seriously hope this doesn't go anywhere.
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07-18-2012, 12:49 PM | #3 | |
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07-18-2012, 03:18 PM | #4 |
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It's all but certain that US retailers will have to start charging sales taxes. States are way too strapped for cash, and Internet sales are taking a bigger slice of the pie.
Amazon is no longer fighting it, and they were the biggest opposition for years. The question now is whether the feds will do something to make it easier for Internet retailers to collect and pay sales taxes. |
07-18-2012, 03:23 PM | #5 |
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Link to Quentin's article (originally on SmartMoney):
http://www.huffingtonpost.com/2012/0...n_1679513.html I'm okay with paying sales tax on 'tangible goods', but I would draw the line with most digital content. After all, we don't actually enjoy rights and privileges of ownership in most cases. For example you cannot give your ebooks to someone else, legally. |
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07-18-2012, 03:44 PM | #6 | |
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But in many other states digital goods are not taxed at all, regardless. So in CA, you can buy ebooks (or MP3s or videos) from anybody and not pay sales tax. CA residents are under legal obligation to pay sales tax on 'tangible' goods, even if the (out of state, online) retailer does not collect it. CA wants Amazon to collect sales tax for 'tangible' goods (which the latter has agreed to start doing next year) but under current law, digital sales are still excluded. So the issue here is whether those states are going to start collecting sales tax for the digital sales as well. I think it would be a very bad policy, but certainly this would not be the first of those. Actually, I'd be in favor of extending tax free status to physical books and media as well, for the same reason that newspapers and magazines generally are: democracies can only thrive with informed populace. Last edited by tomsem; 07-18-2012 at 03:52 PM. |
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07-18-2012, 03:55 PM | #7 |
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Not being in the know, would you pay sales tax on the work a painter did on your house, or the repair work of a plumber? In Sweden we do, but if you don't in the US, that would imply that you only pay sales tax on actual physical goods. In that case wouldn't it be requied by law to define eBooks and Mp3 as physical goods?
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07-18-2012, 04:28 PM | #8 | |
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07-18-2012, 09:56 PM | #9 | |
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Most states that charge sales taxes specify that it applies to tangible and intangible goods...but some states only apply it to tangible goods. I think the most confusing area is groceries. Most states (I think) don't charge sales tax for groceries, but what counts as "groceries" varies widely, with ready-to-eat food typically being charged tax...although what ready-to-eat food is can be complicated, too. In my state, toilet paper is taxed, but I've been to states where it isn't. |
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07-19-2012, 02:05 AM | #10 |
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So if I understand this correctly, in most states goods are charged a sales tax (provided the state has a tax) and now they want to charge that on online shopping, including eBooks and music files. However, other legislation (mainly federal, perhaps?) treats eBooks and Mp3s as a service or rental, since it is a licens for usage?
In my mind this doesn't add up. Either it is a goods, and has to be treated like one, including the ability to re-sell it and loan it to someone, and in return the consumer has to accept getting to pay sales tax on it, or it is treated as a service, you can't resell it or loan it to someone, on the other hand you don't have to pay sales tax on it. I suppose my confusion is the basis for the pervalent litigation in the US. |
07-19-2012, 02:22 AM | #11 | |
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07-19-2012, 02:29 AM | #12 | |
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07-19-2012, 02:30 AM | #13 |
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I recall when I had my web site, which sold roleplaying stuff, mostly books, that customers in certain countries in Europe (UK, IIRC, but it's been a few years) would ask me specifically to list their purchase on the customs forms as "books" rather than "games," because books were at a (much) lower percentage, and either would get through their customs people without a problem.
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07-19-2012, 02:33 AM | #14 |
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Yes, (paper) books are zero-rated for VAT in the UK; VAT is payable on games.
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07-19-2012, 02:36 AM | #15 |
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Land of the Free, Home of the Brave, Heaven for Tax Lawyers.
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