http://xboxlive.ign.com/articles/949/949125p1.html
This would probably include things like Impulse and Steam.
Interested in the subject, and still sorely missing the old Watch This Post function.
Sucks for the people living there.
While I am not a big fan of paying more for anything, Taxing digital purchases diffinatly makes sense.
Whenever I bought anything online for the past 3 years there used to be no tax on it, and now they are starting to tax internet transactions which I think is bullocks. The shipping cost to me was like the tax in which I was okay with because the mail man needs money too; but it is absurd for the government to try and get taxes on everything.
This ties in neatly with this reading of Stross's Halting State, specifically:
"...it is practically impossible for traditional authority-based politics to cope with a world of this kind. The traditional state, if it is to work at all, needs an underlying system of responsibility and accountability, with clear lines of command[...]States simply aren’t in control any more, to the extent that they ever were."
You can't blame governments for attempting to control new systems with traditional heirarchy, but it should become clear pretty quickly that it doesn't work. Of course, that won't stop them...
I really would like to see Brad's feelings on this. It won't change my mind, but I'd be interested.
The main hypocritical reason it won't change my mind as I'd get taxed on it.
Apparently this may be a new thing, but here in Utah I'm now finding myself getting taxed for online subscriptions as well... never happened before, but now anything like an MMO subscription or the like, the good ol' state gets their share. Pff!
I'd be okay with a local state taxing internet purchases if it can be shown that there are costs associated with it. For instance, a brick and mortar store located in a city uses and takes advantage of certain things, such as infrastructure, police, fire, etc. Even purchasing items that are shipped online I could see to some degree, because it's using roads (or airport) to ship them to you.
But online digiital purchases, or in my case online subscriptions? I don't know about that. Yes, you can say digital purchases are using internet infrastructure, but in most cases that is done by the private sector, and is the reason I pay my ISP each month.
Heh, I'd try to find away around it. Have a bank account in WY and pay through a proxy? WA state residents already pay taxes on Steam since Valve is located there.
I think taxing Internet transactions is absolutely crazy but it appears to me that the issue is not if but when this will happen everywhere. The thing is, there seems to be a tendancy for all things taxed to expand past reason. If I purchase an item online and the vendor I purchase from has a brick and mortar in my state, I pay sales tax. OK, I am fine with that and I think that is what this article is discussing. However, if that vendor does not have a store in my state, I don't pay sales tax. There are some that feel a tax should be levied on ALL Internet transactions regardless of where the store is actually found. To me, that is paramount to taxation without representation.
The sales tax is a point of sale tax. You are not buying something in your home state, it's dishonesty to tax them. The sales tax from the retailers point of origin on the other hand is an entirely logical addition to the price. That's not happening because they're terrified of taxing locally. When your tax base can theoretically do business from space, you have to treat them fair or they'll use that near limitless mobility and leave your ass holding the bag.
They want to save the traditional retail chains because half of them aren't going to be around ten years from now, but they don't want to tell the public that in return for them, a billion dollar a year industry moved to state x and said fuck you in return.
To avoid the idiotic argument, no, I don't think retail is disappearing, I think half the chains are disappearing. As in too many stores and not enough shoppers to fill them outside of black friday.
You are required to claim any sales taxes that you did not pay due to online purchase on your yearly state tax form if your state has a sales tax (currently nineteen states have this specific section in their tax code). The point of sale was your billing address. That makes you rather than the business the responsible entity for making sure they got their sales tax.
It's tax law. You don't have to like it, you just need to be prepared to bend over if your state decides to audit you. Because you really don't want to pay the penalties for negligently understating your taxes. They add interest.
Did you really think your state government wouldn't get money from you if you bought something while in the state?
They already had the sales tax for brick and mortar stores in the state with online sales...this is just the next logical step.
If you don't like, find some way to get yourself audited for this specific situation and take it to Tax Court. Who knows, maybe you'll set a nice precedent.
I'll root for you.
In canada, especially in Quebec we are taxed when we sneeze so we are use to it. Welcome to the club.
If you make more then 50K a year you pay the the crown 52% in imcometaxes. The you have the federal taxes and then you pay the provincial taxes on anything you buy.
So when I buy a game say 40$ you have to add 14% in taxes. It's like that for everything here. Online purchases as well.
Abuse your tax refunds, friends. Learn your system.
I used to live in Ottawa, so I can definitely relate That being said, Canada has many, many perks as well. I may not want your taxes but my medical bills wouldn't be too desirable to you either! That's another subject entirely, though, I just wanted to give a shout-out to a Quebecois
Free medical is something that makes taxes here berable I agree CHEERS!
the health care is not free. you are paying for someone else to use it while you are healthy and if you go through life without using it you would be waisting your money
Isn't that what insurance is? You pay into the company, the money is pooled and used by those that need it. Be it medical, auto, etc... you could go your entire life without being in a car accident, or having medical problems more serious than a normal office visit... and so you wouldn't see a dime of it, but rest assured others are.
Correct me if I'm wrong.
This is true. However it is not run by one company or body like socialized health care. Also, if our markest were more free then the compition between the companies would also help with any sort of cost etc. Moreover, the main problem with insurance companies is that pact that they are pubicly owned with stocks etc. and according to law the only concer to them is to turn a profit for their investors, thus pushing people who really need the help out beforethey really get it. A truely preivate insurance system without public ownership would be prefered.
Another thing that the healthcare in America has done has forced us to be more preventive in our personal health concerns so that we do not need to spend the money that we have earned. This creates a system where we can end up healthier in the longrun because of money which is what it all runs down to.
I'm a terrible threadjacker myself, but really, we already have an ongoing OT on health policy. I was hoping to see some detailed talk about the NC situation, or at least some closer digressions on the relative merits of complex vs. simple tax systems.
I'm a so-called liberal who is pretty close to ready to ditch the IRS for a national VAT if it has sufficient reach into the service sectors. I'm also a longtime student of this 'digital economy' stuff, and am a little disappointed that none of the sharp heads I know to be around here have weighed in on the basic question of whether or not it is time to take the net-based economy off the training wheels and put it on an even tax playing field with brick and mortar businesses. As it currently stands, the total collection of tax policies in the U.S. amounts to a sort of internal protectionism that favors online merchants over others.
First of all, there has to be some sense of objectivity when discussing this. It goes without saying that the consumers who gain an unfair advantage by using these services would like them to be kept that way (at least that would be the initial response from most).
Since this community is based around software and games, I will keep to those and stay away from digital music downloads.
I sincerely enjoy the term "international protectionism". Normally the infant industry argument is applied on a nation- or region-level. However, for two main reasons taxing digital goods will be difficult: firstly, as noted above, an uneven legislated taxation will simply "push around" the affected companies, and the different legislators will end up competing with each other. While this may not necessarily be a bad thing, it does mean that the development of an international tax level will be significantly slowed unless action is taken on an international level. And secondly, taxing digital goods is hard because it doesn't pass customs (you can't easily measure it) and the VAT is usually charged based on the location of the buyer, not the seller. The international protectionism is enforced on an international level, and anyone who wishes to change that without the consent of everyone else in the world, will in fact end up losing in the long run (at least theoretically) as companies adapt to the local taxation higher than their near and far neighbours.
Producers are taking this into their own hand, and going over the head of the retailers. Impulse and EA are perfect examples of this. They sell through normal stores, but also present the digital goods on their own. Where the producer does not make a digital version available, subretailers take the matter into their own hand and sell cdkeys on the internet(s). Thus, whether or not producers choose to sell digital versions, they are available on the market. Taxing digital goods will hit every producer. The question here is who of the suppliers it will affect, because that is where the unfair advantage lies. Right now, the taxation system favors digital goods. Anyone who supplies digital goods will therefore be hit (this is obvious) while physical retailers will only be hit indirectly as turnover for producers decrease (physical retailers would still benefit overall due to rules of substitution - at least, that is the logical conclusion). Of course they are not always separate, for example GAME (game.co.uk + local versions) supply both digital and physical sales, but it would still apply to internal divisions).
Does the infant industry argument apply to digital goods? This is the fundamental question that has to be answered. If the argument applies, the taxation should not be placed. If it doesn't apply, then the taxation should be placed (although it may not be beneficial to individual regions). My conclusion is that the argument no longer applies. This is based on three pieces of vital information.
1) New titles are consistently sold digitally, it is no longer a fringe supplier industry. As noted above, almost every game can now be bought digitally.
2) The digital supplier industry is seeing consistant and large increase in sales and customers, both in relative and absolute terms. We all remember Steams announcement that they had reached 15 million users. If my memory does not fail me, frogboy commented on these forums that we (the forum users) seriously underestimated their sales through impulse.
3) Digital goods are now being sold by traditional online stores who used to deal primarily with taking orders through their sites and then sending the physical package by snail mail. Amazon is a prime example of that.
These 3 things put togheter means that the movement towards serving digital goods is happening where it hasn't happened already. Frankly, the infant industry argument cannot possibly apply any longer, when major suppliers such as EA and Amazon are seriously involved, and suppliers who specialize in digital goods have been proven profitable. Furthermore, the market is growing, and while taxation will certainly hamper the growth, it is a fair assumption that it will continue to grow or at least certainly not shrink.
Edit: It should be noted that taxation has already started happening on digital goods. North Carolina is by no definition "first".
actually a lot of states are looking at this for revenue growth or more money to waste on pork but anyway......Internet sales are a tricky subject and some states are even "demanding" that you declare your taxes paid when you go across the state for purchases this idea is not new and has been debated for at least 15 years now with some degree of success and mostly failures. Now some states have no state sales tax period (delaware is one) so if the game company is based there or someone from that state takes a download...I don't see the taxes happening. The states are screwed up enough and waiting on "bailouts" from washingcow (combination of washington and moscow) is going to make it worse. If the states just wise up and quit spending money on worthless pork projects, this country will be ok. (and banning those pay option arm's will really do the trick)
VAT is bad. Hidden tax systems are what let congress spend money like crazy. When you can't see how much the thieves are stealing from you to build roads through their undeveloped real estate, it doesn't bother you as much. That will lead to even more complacency than we have now. It also hoses certain types of industry in a cataclysmic way. When you're selling items with huge work related costs and minimal resource related costs, you're fucked.
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