Oops sales tax

Kumabjorn · 12-18-2011, 06:41 AM

Bought a fairly expensive e-book from Amazon yesterday, $29.99 but I was charged $31.97, the receipt said $1.98 was sales tax. The obvious question is, what states doesn't have a sales tax?

HarryT · 12-18-2011, 06:43 AM

You're in Sweden, aren't you? Do you not have to pay VAT on online purchases there? I don't know if it's the same for you, but here in the UK, Amazon sell eBooks via their Luxembourg subsidiary, and so we pay the Luxembourg VAT rate of 15%.

Asawi · 12-18-2011, 07:03 AM

Harry is probably correct. Swedish VAT for books is 6% (on most other goods it's 25%) and that would make the figures right.

SteveEisenberg · 12-18-2011, 08:43 AM

Quote:

Originally Posted by Kumabjorn

The obvious question is, what states doesn't have a sales tax?

If for delivery, physical or electronic, into their territory: Oregon, New Hampshire, Delaware, Alaska and Montana.

Plus, currently, but perhaps not for long, there is no sales tax if the company lacks a physical presence in the state being delivered into. Plus, there are some states that have a physical Amazon presence, such as a warehouse, but don't charge Amazon sales tax as part of deal to bring Amazon jobs into the state (Kentucky). Plus there are some states where Amazon has facilities in the state and yet doesn't pay the sales tax because of weak law enforcement. My own state, Pennsylvania, is in this category, but plans to start enforcing the existing sales tax law for firms like Amazon effective February 1, 2012.

The Amazon web page giving the enforced rules, as of today, is here:

http://www.amazon.com/gp/help/custom...?nodeId=468512

Bad publicity over how Amazon treats warehouse employees, in our state, didn't help their case.

Jonas777 · 12-18-2011, 09:15 AM

Quote:

Originally Posted by HarryT

You're in Sweden, aren't you? Do you not have to pay VAT on online purchases there?

Yes, Sweden has a kind of VAT called "moms". However we are not used to have it added when paying. The law here says it has to be included in the price shown on the goods.

Asawi · 12-18-2011, 09:49 AM

Quote:

Originally Posted by Jonas777

Yes, Sweden has a kind of VAT called "moms". However we are not used to have it added when paying. The law here says it has to be included in the price shown on the goods.

But when buying from outside EU we should be aware that it can be added, either by the merchant (as has been done here, probably something Amazon has to do in order to be allowed selling electronic goods to us) or (on physical goods) through custom's fees.

Kumabjorn · 12-18-2011, 09:58 AM

This is the first time it has happened to me so i was just surprised. Felt like I should have been informed about this change in policy. Had it been a $5.74 book i probably wouldn't have noticed it.

Asawi · 12-18-2011, 10:37 AM

http://www.amazon.com/gp/help/custom...?nodeId=468512

Apparently it can differ between different publishers.

drew2720 · 12-18-2011, 12:31 PM

I'm in Kansas and just started noticing sales tax taken out more and more, not so much on ebooks yet, but on my prime purchases that come out of warehouses in Nevada and Tennessee....

RainingLemur · 12-18-2011, 12:56 PM

I haven't noticed any tax on ebook purchases (Nevada), so... Yeah. I know that we don't have tax on food...didn't think that ebooks constitute food (food for the mind, maybe...).

emalvick · 12-20-2011, 11:59 AM

As far as I know (in the US), a product doesn't have to come from your home state to be taxed by your home state. The business just has to have a presence in that state.

Thus, I've purchased electronic products from companies that have outlets in California and been taxed my California sales tax, even though the actual product came from other states (that company shipped from Ohio).

I do think it will probably change, and I am unsure of how sales taxes in the U.S. would work with respect to non-physical products. This may be why the user in Nevada was not charged sales tax for his ebooks.

It does make me wonder in general at how electronic file type products can be taxed, even in California, which is a big driver in trying to get sales tax enforcement from Amazon (whom has no direct presence in California). For instance, have Itunes downloads ever been subject to sales tax? Perhaps the sales tax is included in the price. That I know of the only things exempt from sales tax in California are services and foods (with certain restrictions).

Little.Egret · 12-22-2011, 07:04 PM

Quote:

Originally Posted by Asawi

Harry is probably correct. Swedish VAT for books is 6% (on most other goods it's 25%) and that would make the figures right.

So Swedes are fortunate. I looked it up on the EU site and it said that the current rule for intangible items like downloads is based on the location of the supplying business. In my case in the UK Kindle eBooks are sold by Amazon Media EU SArl in Luxembourg so 15% (UK rate is 20%). The EU intend to change to the location of the customer in ? 2015 ?

If the sale is by the Swedish branch of Amazon that would account for the Swedish VAT rate. But the rate should be that for downloads, not books.

Little.Egret · 01-01-2012, 05:54 PM

Quote:

Originally Posted by Little.Egret

So Swedes are fortunate. I looked it up on the EU site and it said that the current rule for intangible items like downloads is based on the location of the supplying business. In my case in the UK Kindle eBooks are sold by Amazon Media EU SArl in Luxembourg so 15% (UK rate is 20%). The EU intend to change to the location of the customer in ? 2015 ?

If the sale is by the Swedish branch of Amazon that would account for the Swedish VAT rate. But the rate should be that for downloads, not books.

And following up to myself, effective today, 1st Jan 2012, Luxembourg has reduced its sales tax rate on eBooks from 15% to 3%

So many eBooks are now 10% cheaper from Amazon.co.uk and I expect the same will apply for other EU residents whose emails read "Sold by: Amazon Media EU S. r.l. ". More may follow depending on what "price set by the publisher" means.

HarryT · 01-01-2012, 06:21 PM

Most discounted book prices appear not to have changed. If a book was reduced from £7.99 to £4.99 then it's still £4.99, only now it's reduced from £7.10 (or whatever the lower figure is).

Some have certainly come down, though. I notice that a book I bought last week for £8.87 now costs only £7.93.

RolandD · 01-01-2012, 10:03 PM

I may be wrong, but my understanding is that if a business has a presence in a state that the product is being purchased by mail-order of electronically, it is the businesses responsibility to collect the sales tax. If the business does not have a presence in that state, it is the buyers responsibility to pay the sale tax on the item. This, of course, only applies to the US.

12-18-2011, 06:41 AM	#1
Kumabjorn Basculocolpic Posts: 4,356 Karma: 20181319 Join Date: Jul 2010 Location: Sweden Device: Kindle 3 WiFi, Kindle 4SO, Kindle for Android, Sony PRS-350 and PRS-T1	Oops sales tax Bought a fairly expensive e-book from Amazon yesterday, $29.99 but I was charged $31.97, the receipt said $1.98 was sales tax. The obvious question is, what states doesn't have a sales tax?

01-01-2012, 06:21 PM	#14
HarryT eBook Enthusiast Posts: 85,560 Karma: 93980341 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	Most discounted book prices appear not to have changed. If a book was reduced from £7.99 to £4.99 then it's still £4.99, only now it's reduced from £7.10 (or whatever the lower figure is). Some have certainly come down, though. I notice that a book I bought last week for £8.87 now costs only £7.93. Last edited by HarryT; 01-01-2012 at 06:23 PM.

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12-18-2011, 06:43 AM	#2
HarryT eBook Enthusiast Posts: 85,560 Karma: 93980341 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	You're in Sweden, aren't you? Do you not have to pay VAT on online purchases there? I don't know if it's the same for you, but here in the UK, Amazon sell eBooks via their Luxembourg subsidiary, and so we pay the Luxembourg VAT rate of 15%.

12-18-2011, 07:03 AM	#3
Asawi Gadgetoholic Posts: 1,467 Karma: 3865860 Join Date: Feb 2011 Location: Sweden Device: Kobo Libra2, Tolino Vision 6	Harry is probably correct. Swedish VAT for books is 6% (on most other goods it's 25%) and that would make the figures right.

12-18-2011, 09:58 AM	#7
Kumabjorn Basculocolpic Posts: 4,356 Karma: 20181319 Join Date: Jul 2010 Location: Sweden Device: Kindle 3 WiFi, Kindle 4SO, Kindle for Android, Sony PRS-350 and PRS-T1	This is the first time it has happened to me so i was just surprised. Felt like I should have been informed about this change in policy. Had it been a $5.74 book i probably wouldn't have noticed it.

12-18-2011, 10:37 AM	#8
Asawi Gadgetoholic Posts: 1,467 Karma: 3865860 Join Date: Feb 2011 Location: Sweden Device: Kobo Libra2, Tolino Vision 6	http://www.amazon.com/gp/help/custom...?nodeId=468512 Apparently it can differ between different publishers.

12-18-2011, 12:31 PM	#9
drew2720 Connoisseur Posts: 57 Karma: 10 Join Date: Jan 2009 Location: KS Device: K2i, K3, DXG, PW2, Sony prs650/350,KoboMini/AuraHD	I'm in Kansas and just started noticing sales tax taken out more and more, not so much on ebooks yet, but on my prime purchases that come out of warehouses in Nevada and Tennessee....

12-18-2011, 12:56 PM	#10
RainingLemur Spork Connoisseur Posts: 2,355 Karma: 16780603 Join Date: Mar 2011 Device: Nook Color	I haven't noticed any tax on ebook purchases (Nevada), so... Yeah. I know that we don't have tax on food...didn't think that ebooks constitute food (food for the mind, maybe...).

12-20-2011, 11:59 AM	#11
emalvick Groupie Posts: 166 Karma: 5358 Join Date: Aug 2010 Location: Davis, CA Device: Kindle 3	As far as I know (in the US), a product doesn't have to come from your home state to be taxed by your home state. The business just has to have a presence in that state. Thus, I've purchased electronic products from companies that have outlets in California and been taxed my California sales tax, even though the actual product came from other states (that company shipped from Ohio). I do think it will probably change, and I am unsure of how sales taxes in the U.S. would work with respect to non-physical products. This may be why the user in Nevada was not charged sales tax for his ebooks. It does make me wonder in general at how electronic file type products can be taxed, even in California, which is a big driver in trying to get sales tax enforcement from Amazon (whom has no direct presence in California). For instance, have Itunes downloads ever been subject to sales tax? Perhaps the sales tax is included in the price. That I know of the only things exempt from sales tax in California are services and foods (with certain restrictions).

01-01-2012, 10:03 PM	#15
RolandD Fanatic Posts: 561 Karma: 3228980 Join Date: Aug 2010 Location: Branson, MO, USA Device: Kindle Touch is now my main eReader.	I may be wrong, but my understanding is that if a business has a presence in a state that the product is being purchased by mail-order of electronically, it is the businesses responsibility to collect the sales tax. If the business does not have a presence in that state, it is the buyers responsibility to pay the sale tax on the item. This, of course, only applies to the US.