Reducing VAT on e-boooks, to match printed books rates

[JSWolf]

Originally Posted by stumped

that's not actually relevant. Value Added Tax is a European invention , with all the complexity of a byzantine euro-committee design - its not a sales tax per se. there's no direct USA equivalent

A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed

VAT isthe same thing as sales tax. The only difference is that VAT is the same for the entire UK unlike the US where sales tax can be different for different states.

[Apache]

Originally Posted by stumped

that's not actually relevant. Value Added Tax is a European invention , with all the complexity of a byzantine euro-committee design - its not a sales tax per se. there's no direct USA equivalent

A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed

They may not be the exact same thing, but both are still a tax and are imposed by a Government entity.
Apache

[Quoth]

Anyway, today when you change the prices individually for Amazon Marketplaces, the UK price is broken.
US, Germany, etc are OK.

[ZodWallop]

Originally Posted by JSWolf

But in the UK, the price includes VAT if VAT is to be collected. So as of today, the price should be lower. A £7.99 eBook yesterday should now cost £6.66. But it doesn't because the retailers are cheating customers. The point of doing away with VAT on digital media is to lower the price. This is done so digital media is more affordable because of the the virus.

So what's happening now is the retailers are cheating the customers.

Another way of looking at it is the publishers have been absorbing the cost of VAT until this point. So reducing it to zero benefits the publisher, but not you.

[stumped]

in the UK we have a very stupid set of politicians who , when they are not faffing about failing to buy N95 masks or bragging about how well prepared we were for covid etc, decided that reducing VAT would reduce the price of digital media.
Nice idea, but hopelessly naive. its all about market forces. publishers can still enforce whatever not-quite-actual-collusion prices they choose. I doubt we'll see protesters out on the streets any time soon.

incidentally, these are the same politicians who have slashed local public spending so much that many public libraries are closing, others are shrinking.... yet now they want to encourage us to read !

https://www.librariesdeliver.uk/austerity

According to the joint CILIP/Big Issue report Public Libraries: The Case for Support, revenue funding for libraries has been cut by £243m per year in real terms since 2010. While many Councils have worked hard to protect library budgets, if libraries are going to transform towns and communities across the whole of the UK, we need to see revenue funding through Local Authorities restored to its pre-2010 level at or near £1bn per annum.

[j.p.s]

Originally Posted by JSWolf

VAT isthe same thing as sales tax. The only difference is that VAT is the same for the entire UK unlike the US where sales tax can be different for different states.

There are multiple differences as already pointed out by multiple people that actually live in the UK and actually know what they are writing about.

[stumped]

Originally Posted by j.p.s

There are multiple differences as already pointed out by multiple people that actually live in the UK and actually know what they are writing about.

Like he said.

Actually, in pre-historic pre-EU days we had something called purchase tax. That WAS like USA sales tax. Then we fell for the euro sales pitch and signed up for their new fangled VAT instead. I doubt we knew what we were agreeing to.

This was shortly after we quit blaming our economic woes on the Gnomes of Zurich, and had realised that the White Heat of Technology could not save us either. We may not have had the smartest politicians but we had the Best Slogans.

And really good public libraries.

"Those were the days my friend..."

[John F]

Originally Posted by Apache

In the US each State sets and collects it's sales taxes. In Georgia the retail price does not include taxes. Taxes are added at check out and collected by the retailer. The retailer then pays that month's collected sales tax by the 20th of the following month. If tax rates change the retailer makes the adjustment on his end, but it does not affect the retail price.
Apache

And some states do not have a sales tax.

[JSWolf]

Originally Posted by ZodWallop

Another way of looking at it is the publishers have been absorbing the cost of VAT until this point. So reducing it to zero benefits the publisher, but not you.

How can removing VAT bother the publisher? They will still get the exact same profit.

[JSWolf]

Originally Posted by j.p.s

There are multiple differences as already pointed out by multiple people that actually live in the UK and actually know what they are writing about.

I asked my wife who is a UK citizen (Scottish) and she said it is exactly the same. And as she's lived in the US as well, she know what sales tax and VAT are.

[stumped]

Originally Posted by John F

And some states do not have a sales tax.

So are Amazon book prices different in different states?. What stops someone from having a fake addresss in cheapest state and buying all e books for that address?

[JSWolf]

Originally Posted by stumped

So are Amazon book prices different in different states?. What stops someone from having a fake addresss in cheapest state and buying all e books for that address?

I've never paid sales tax on eBooks from Amazon in the US.

[John F]

Originally Posted by stumped

So are Amazon book prices different in different states?. What stops someone from having a fake addresss in cheapest state and buying all e books for that address?

I think the prices are the same, but final cost will be different depending on shipping address?

I looked at an old order for my daughter who lives NYC. I live in CT (the billing address), and it was shipped to NYC (a different state, and maybe the city also charges sales tax?). I was not charged for sales tax in CT, but was charged for sales tax in NY(C).

And for my state, we are supposed to pay a use tax (if applicable).

[JSWolf]

Massachusetts didn't have to pay sales tax until they had a physical presence (Amazon store).

[AnotherCat]

Originally Posted by JSWolf

VAT is the same thing as sales tax. The only difference is that VAT is the same for the entire UK unlike the US where sales tax can be different for different states.

That is totally incorrect. As has been pointed out VAT (called GST in some countries) is a consumption tax.

As has been explained each of the sellers involved in the production of the good or service through the supply chain to final seller each pay VAT to this effect - their total inputs on which VAT applies are deducted from their total sales on which VAT applies. It is possible, and often happens, that for a business in the supply chain the total VAT on the inputs is higher than the total VAT on their outputs which although they "charged" VAT on each of their sales means that they actually get a VAT refund from the country's tax department.

Where people who do not understand the workings go wrong is that they assume that the VAT charged on items sold all goes to the tax department. It does not, only the difference between the total VAT paid to the business's suppliers and the VAT calculated on total VAT non-exempt sales goes to the Revenue. When one buys an item with 15% VAT applicable to it, that 15% does not get channeled to the Revenue. If, for example, a supplier sold only one taxable item a year then just because he sells that with 15% VAT "associated" with the selling price he does not return that 15% to the Revenue. If the 15% VAT he has paid on all his inputs from his suppliers is greater than the 15% "associated" with his selling price then he would (for example if there was a loss on the sale), in fact, get a VAT refund from the Revenue.

It is quite a hard concept for some people to get their heads around but it works very well and tax fraud is reduced in most cases, businesses like it as it is very easy to implement, and as sales prices in most (all???) VAT/GST countries have to be advertised as the total cost to the customer it is essentially of no complication to them, in that price is the cost of materials, labour and taxes.

In NZ GST is applied to essentially every common good and service except financial transactions (so one does not pay GST on purchases of company shares, for example); nor on second hand goods in order to avoid multiple taxing of the same good through its useful life (so a house buyer pays GST on a house just built, but not on second hand houses). GST fraud in NZ is very low and there is little chance of evasion by wrongly categorizing goods; and there is a very high level of acceptance here that this is the way it should be. Australia exempts some goods, mainly basic foods (there may be others, but foods serves this example) which muddies the waters as it can be unclear or contorted to be unclear as to what category the good is in.

The EU is a whole different ball game as, for example, the countries in it have very loose trading borders but the countries have differing VAT rates. So, as has been pointed out, there is a hothouse for fraudulent VAT transactions.