But when I get to the final stage of check-out, I find that tax is being added, at the rate of 15%
Is this dependent on where I live? To whom is this tax being paid?
If it has something to do with credit cards, then just make PayPal available - that shouldn't be a problem either.
I'm sure she'll turn up soon with answers.
Annoying, though!
Do I have to pay sales tax?
We charge applicable sales tax for orders shipped to California, Minnesota and Washington. Sales tax is automatically computed on both product(s) and shipping costs. These taxes are based on the location of purchase.
Pursuant to the Digital VAT Directive, as of 1st July 2003, European customers will be charged VAT (Tax) on all downloadable digital products and services, including software at 15%.
Minnesota and California? Any reason?
(Asked the Minnesota resident)
VAT, on the other hand, I know of from being part of a military family in Germany. In my experience, it meant that you (as an American Military Member) could get discounts on some things with the correct forms due to being paid in a different currency than your host country. I did not realize they also used it as an excuse to tax overseas customers. Is this also due to exchange rates, because in '03, the Euro was certainly not better then the dollar, making that argument utterly void. I also hate the idea that, because you have to use an International Cable or Satellite System (neither of which cost America any money), they feel free to charge you 15% extra for no particular reason.
As I said earlier, this all seems very arbitrary and incredibly unfair to me, but perhaps there are Laws in place for specific reasons that I am not seeing.
EDIT: Also, isn't WotC HQ in Seattle, Washington?? ',: O
In general sales tax or VAT is based on locations that you have a business presence. Thus logic suggests that Digital River has an office in each of the three US states as well as the EU for the VAT.
It is not like the vender gets to keep the tax.
And really, this Digital River thingie doesn't even support paypal.
I don't play any MMOs, but I imagine that European customers probably have to pay VAT on those subscriptions, too. I still wonder who gets the tax revenue (hopefully HM Customs and Revenue, as I'm in the UK!)
VAT (and sales taxes) and the Internet always cause anomalies - looks like the EU has tried to close some of the potential loop-holes!
I am neither a lawyer nor an employee of any of the companies or governments in question. (Actually, now that I think about it, I'm not an employee of any company or government period, unless you count having some of each as freelance clients, and then not these.
)Where I live, books are 0% rated for VAT. Of course, DDI isn't a book, and the EU VAT regime is clearly the operative law here.
Awesomeness. Add in the fact that I can't use paypal, and I'm significantly less enthusiastic than I was.
I don't like it. My DDI subscription is hanging by a thread.
Guess my new residence as far as my WotC account is concerned will be somewhere in the other 47 states or a non-EU country
SWEET! So, since I live in the state where digital river is headquartered, I get to play sales tax, but if I lived in any of 47 other states I would not?
Awesomeness. Add in the fact that I can't use paypal, and I'm significantly less enthusiastic than I was.
Yeah, and I live in a state with two major amazon distribution centers--but it's not amazon's fault, it's just the way it is. Cost of a free society and all that.
Tempted to pass this up now.
No paypal option - seriously guys what are you doing...
Drivethru etc. no such charge, paypal easily.
Gonna think on it.
John
If you import a physical object into the EU, the authorities in the country where the goods enter the EU can charge import duty and VAT. Fortunately for me, books are 0% rated for both in the UK, so when I buy (for instance) Pathfinder scenarios from Paizo, there's no hold-up, and no extra charge, as there is nothing to pay.
The Directive referred to by Solice (probably - I've not explored this in great detail!) covers electronic services, rather than the supply of physical goods, setting a uniform VAT level. Among other things, this means that European providers of electronic services are not undercut by non-European providers, as they would be if a provider in the UK had to collect a particular level of VAT, a provider in France a different one, and a provider in the US no VAT at all.
I expect pdf sales are a grey area where technically we should be paying VAT, but the US-based companies providing the service aren't concerned to collect it. Since WotC has chosen an international online payment provider which does trade in Europe, we have to actually follow the rules because the payment service is mandated by European law to collect the VAT.
FYI, I just subscribed from here in Australia and was not charged any Sales Tax at all. So obviously they don't have an office Down Under.
John
Or Australian law doesn't require you to pay sales tax when purchasing electronic services, full stop, or doesn't require you to pay when purchasing electronic services from outside Australia. Or, it does, but hasn't yet found a way of ensuring that the companies collect the tax!
Seems like (once again) if they weren't doing everything last minute, we might have some idea that this was coming...or maybe they could have avoided it in some way (by picking a different provider).
Hoo- rah.
It wouldn't help those of us in the EU, of course (if the payment provider follows the rules) as VAT appears to be charged on any electronic service regardless of where it originates, but would help the US customers!
I think they are skimming money and trying to cover it up with "taxes"
Are there states in the US which do not charge sales tax? If so, why don't all of the payment facilitation providers set up shop there - surely they then have a competitive advantage as companies can use their services without some of their customers having to pay extra.
It wouldn't help those of us in the EU, of course (if the payment provider follows the rules) as VAT appears to be charged on any electronic service regardless of where it originates, but would help the US customers!
US tax structure is diverse, one should remember that in effect the US is a republic of several state (Nations) that have ceded some authority to the Federal Government. The tax structure of each of the many states vary, most have a sales tax, some have a gross receipts tax, all have a land tax, some have a personal property tax, most have an income tax.
Going to a state with lower or no sales tax could result in paying higher other taxes, also there is issue of location, things like labour costs, access to shipping routes (Yes this applies even to the Internet, closer to truck line the better, less data packages lost) and so on.
Location based on just taxes does not exist, taxes are just of one of many factors considered.
If Blizzard isn't charging European subscribers VAT, it is probably not complying with the EU law - and, technically, European WoW subscribers should contact their revenue services and pay the VAT anyway. Obviously this doesn't happen, and no-one is going to quibble about those values, though the system does exist (primarily, I imagine, as VAT isn't actually a sales tax, but a transaction tax: b2b transactions are liable for VAT just as much as business to consumer ones).
Location based on just taxes does not exist, taxes are just of one of many factors considered.
True ... but what we're discussing here is the legal location of a provider of electronic services. All they need are some computers - so while cost-of-living, availability of labour, and personal and corporation tax systems will impact the choice of location, the ability to offer your customers a simple system which won't annoy residents of a particular state would seem to be an advantage!
This is very odd seeing as how theres no tax for MMO customers. It's the same digital service...
I think they are skimming money and trying to cover it up with "taxes"
It appears unlikely skimming is occurring, though that could be checked on quickly. Depending on sales volume a report will be filed in at least 3 months and large volume requires more often reporting and payment.
If in fact Digital River does sell for MMO customers in the same location and not charging tax I suspect two possible reasons.
1) ID is not registered by address so Digital River has no idea it is being sold in state, thus do not have enough knowledge to collect the tax.
2) MMO is not subject to tax.
Oh there can be other reasons as well.
True ... but what we're discussing here is the legal location of a provider of electronic services. All they need are some computers - so while cost-of-living, availability of labour, and personal and corporation tax systems will impact the choice of location, the ability to offer your customers a simple system which won't annoy residents of a particular state would seem to be an advantage!
About 5 states do not impose a sales tax, IAE it is not just computers, they can be contracted out- It is computers and employees in the same state that trigger sales tax charge.
List of state sales tax rates, if any http://www.taxadmin.org/fta/rate/sales.html however the site does indicate at times local (smaller municipalities, like cities and counties) sales tax applies.
If point of Sale is made in person then Local and Sate Taxes apply
for mail order or online
If Point of Sale (Electronic or Mail Order) and destinations are in the same City then Local and State State Sales apply.
If Point of Sale and Destinations are in the same State then only State Taxes Apply
If Point of Sale and Destination are not in the Same State then No Taxes are imposed..
As for Out of Country..Everyone's quess is as good as anothers..
SURPRISE Aberzanzorax! Minnesota=D&Di!!!!
Who knew?
A plumber hired in the UK adds 17.5% VAT to what he charges - that's our level of transaction tax for most goods and services, so actually this tax is lower than purely internal taxation.
The EU likes VAT. I am not entirely sure why, but I think part of it is because some member states particularly like VAT, and wide imbalances in tax rates distort the internal market - we don't like one state's government being able to boost its businesses by charging vastly lower tax rates than other states.
There's no guarantee that MN residents are paying 15% - that's the European Union VAT level for electronic services.
A plumber hired in the UK adds 17.5% VAT to what he charges - that's our level of transaction tax for most goods and services, so actually this tax is lower than purely internal taxation.
The EU likes VAT. I am not entirely sure why, but I think part of it is because some member states particularly like VAT, and wide imbalances in tax rates distort the internal market - we don't like one state's government being able to boost its businesses by charging vastly lower tax rates than other states.
Until a mod complains about taxes (or discussion about them) I reply.
The MN sales tax is listed in link I provided in prior post, the state tax rate was not 15 percent.
Local taxes if and city or county has them will likely be added if you live in such a place.
VAT (Value Added Tax) is in some ways just a sales tax, however I have seen claims that the VAT can get applied many times. Manufacturer to Wholesaler, Wholesaler to Retailer, Retailer to Customer. The theory I guess the item becomes more valuable because somebody wants to buy and sell it. I do know the US apparently considered such a tax, however it did not go far. I am uncertain on how the EU and member nations use the VAT. Clearly some items can be treated at different rates then others.
One big reason to like VAT is that is where the money flows, people need to buy things. Companies can go off shore to make things. Rich people do not need to spend money.
Now a VAT on Investment sales would be interesting, because that is where the real money (on paper) is.
My latest post began primarily as a response to Crimson Lancer to try to clarify that 15% was what I was being charged, and that residents of those US states who have to pay sales tax on subscriptions are probably going to be charged a lower rate - European levels of VAT tending (I believe) to be higher than US levels of sales tax.
I started this thread because I was unaware of the requirement to pay VAT on my subscription (primarily because it wasn't mentioned anywhere on the payment screen!) I can't blame WotC for policies of the European Union, nor for its payment processing company complying with the law!
And, no, I wouldn't have to pay 15%, it'd be Minnesota sales tax...
AGAIN, though, had they chosen a different company (and maybe done a bit more research to do so), I wouldn't have to pay that.
It really encourages those of us stateside with friends in non taxed states to all get a single account for our group and just share it. (Not that the cost alone doesn't do that)...plus the lack of insider features that allow actual game play....
I agree with you regarding the US, though.