Is there a sales tax on digital downloads?

[promediasys]

I've been an affiliate for years but I've never tried selling my own products.

My question is if you sell an ebook or other digital information product to a person in your same state, are you required to collect sales tax?

Thanks,

David

[SurviveUnemployment]

Originally Posted by promediasys

I've been an affiliate for years but I've never tried selling my own products.

My question is if you sell an ebook or other digital information product to a person in your same state, are you required to collect sales tax?

Thanks,

David

Good question. I would guess so, and I would certainly err on the side of caution.

[Jay Jennings]

You're not required to collect sales tax, but your state is going to want part of your sales. So if you don't want to collect it, sales to those in your state (assuming a state sales tax) will mean less money in your pocket because the state will get theirs no matter what.

The only way around that is to stop electing people who think they know better how to spend the money you make. As long as you give them power, they'll use it.

Jay Jennings

[GarrieWilson]

It depends on the state and the item.

In my state, an MP3 isn't but if you purchase a digital copy of a say MS Office it is.

Better ask an accountant and good luck finding one that knows about digital business.

-g

[Nutrifitness]

Originally Posted by GarrieWilson

It depends on the state and the item.

In my state, an MP3 isn't but if you purchase a digital copy of a say MS Office it is.

Better ask an accountant and good luck finding one that knows about digital business.

-g

LOL that's so true

[dljmktg1]

It is a state to state type of question.

But, the best way to find out is to contact the state agency that is responsible for collecting taxes. The name will vary, but is usually something like a tax assessor and collectors office. You should be able to get a number in the local phone book.

More often than not the answer to the question will probably be yes. From a sales point of view there is little difference between ordering a paper copy of a book online and having it shipped, and ordering a digital copy and downloading it. It is still a book. The only difference is a matter of convenience. I know a lot of us here will disagree, but this is the way most states view it.

And, as has already been stated. You are never required to collect sales tax from your customer. You just have to pay it anyway.

Dan

[Rolliesworld]

Originally Posted by dljmktg1

And, as has already been stated. You are never required to collect sales tax from your customer. You just have to pay it anyway.
Dan

When you guys are saying sales tax, are you referring to what is called VAT (value added tax) in your country and which would be called GST (goods and services tax) over here in Australia?

[AndrewCavanagh]

Originally Posted by Rolliesworld

When you guys are saying sales tax, are you referring to what is called VAT (value added tax) in your country and which would be called GST (goods and services tax) over here in Australia?

The system is a little different in the USA.

In many cases different states charge different sales taxes...which you're supposed to pay if you sell something to someone in the same state...or another state...or any number of other complex rules which each different state creates.


In Australia yes there is GST on downloads.

There's GST on every kind of product or service (with a few exceptions).

But there is a threshold where you can choose not to pay GST.

I'm not sure what the current level of turnover is.

Kindest regards,
Andrew Cavanagh

[Rolliesworld]

Originally Posted by AndrewCavanagh

In Australia yes there is GST on downloads.

There's GST on every kind of product or service (with a few exceptions).

But there is a threshold where you can choose not to pay GST.

I'm not sure what the current level of turnover is.

Kindest regards,
Andrew Cavanagh

Without wanting to hijack the OP's thread ... in Australia you are required to pay GST (currently 10%) on all sales if your turnover exceeds $75,000.
I think the threshold had been $50,000 until recently, but I could be wrong.

[Steve Sanchez]

There is a big movement across the U.S by states to tax internet commerce. The reason is that the states are clambering for ways to generate revenue since most of them are almost bankrupt.

If you notice when you buy something the sales tax is always higher than the state rate. That's due to county and city sales taxes on top of the state rate.

The short answer to your question is that, as others have noted, you need to find out your states regulations on the matter. You should only have to collect sales tax for sales to people in your state.

[promediasys]

Thanks to everyone for your responses!

-David