Hostgator Sales Tax in Texas

by 1960Texan

Posted: 14 years ago 25 replies

INTERNET MARKETING

Just got this email from Hostgator this morning:

"It has recently come to our attention that HostGator is required to be collecting an 8.25% sales tax from all of our Texas-based customers.
This came to our attention after we received a letter from the Texas Comptroller of Public Accounts notifying us that we are being audited. After doing research on the issue and running a few numbers, we were forced to pay close to $500,000 dollars in back taxes on our Texas-based customers."

I know quite a few of you are Texas-based, as I am. How is this going to affect your business? Will you start switching over to different hosts (Bluehost, etc.) or will you pay the few extra dollars per month and chalk it up to the costs of doing business?

As for me, I'm happy with Hostgator, and will continue to use them. I do see a day coming, however, when I base my business in Delaware.

Will

#hostgator #sales #tax #texas

Zeus66 14 years ago

I've been with HG for years and I live and have my business reg'ed in Texas. I didn't get that email. Be careful... could be a phishing expedition. Call HG support to verify.

John
- Thanks
{{ DiscussionBoard.errors[2379495].message }}

Mr. Subtle

14 years ago

Originally Posted by 1960Texan

"It has recently come to our attention that HostGator is required to be collecting an 8.25% sales tax from all of our Texas-based customers.

This came to our attention after we received a letter from the Texas Comptroller of Public Accounts notifying us that we are being audited. After doing research on the issue and running a few numbers, we were forced to pay close to $500,000 dollars in back taxes on our Texas-based customers."

I'm guessing HostGator fired their stoopid accountant(s) over this obvious mistake.

.

Thanks

Signature

{{ DiscussionBoard.errors[2379498].message }}

Caleb Spilchen

14 years ago

For those looking for confirmation from HostGator, I decided to ask them:

(11:19:23 AM) Caleb Spilchen: Hi There, I was just looking at: http://www.warriorforum.com/main-int...tax-texas.html, I noted that someone says this could be a Phishing Attempt, so I was wondering if a HostGator rep could confirm that they will be charging sales tax to Texas Residents, and have been forced to pay 500k.
(11:20:03 AM) Samuel Ha: This notice is correct. We are now required to charge tax for all Texas residents.

Seems its not a phishing attempt, but true.

[ 2 ] Thanks

Signature

Canadian Expat Living in Medellin, Colombia

{{ DiscussionBoard.errors[2379564].message }}

yukon

Banned 14 years ago

[DELETED]

{{ DiscussionBoard.errors[2379596].message }}

1960Texan

14 years ago

Originally Posted by yukon

I also run HG, glad I'm not in Texas.

Looks like a few states are trying to cash in on tax, I think Amazon banned folks in Rhode Island, Colorado, & North Carolina as affiliates.

That's why I made the comment earlier about someday moving my business to Delaware.

Will

Thanks
1 reply

{{ DiscussionBoard.errors[2379604].message }}

Joe Mobley 14 years ago

Originally Posted by 1960Texan

That's why I made the comment earlier about someday moving my business to Delaware.

Will

Or out of the country. :rolleyes:

Joe
- Thanks
- 1 reply
Signature

.
Follow Me on Twitter: @daVinciJoe
{{ DiscussionBoard.errors[2384944].message }}
- 1960Texan 14 years ago
  
  In case those of you outside the U.S. are wondering why I mentioned moving my business to Delaware:
  
  "Delaware does not assess a sales tax on consumers. The state does, however, impose a tax on the gross receipts of most businesses. Business and occupational license tax rates range from 0.096 percent to 1.92 percent, depending upon the category of business activity."
  
  A maximum of 1.92% is a small price to pay when it gives you the piece of mind to know that your affiliate program won't be shut down.
  
  Will
  
  Thanks
  
  {{ DiscussionBoard.errors[2384975].message }}

1960Texan

14 years ago

Originally Posted by Zeus66

I've been with HG for years and I live and have my business reg'ed in Texas. I didn't get that email. Be careful... could be a phishing expedition. Call HG support to verify.John

Never even occurred to me! Probably because I used to earn a service business and had to pay 1 1/2 years back sales tax when I got audited.

Originally Posted by Caleb Spilchen

(11:19:23 AM) Caleb Spilchen: Hi There, I was just looking at: Hostgator Sales Tax in Texas, I noted that someone says this could be a Phishing Attempt, so I was wondering if a HostGator rep could confirm that they will be charging sales tax to Texas Residents, and have been forced to pay 500k.
(11:20:03 AM) Samuel Ha: This notice is correct. We are now required to charge tax for all Texas residents.

Look at your bad self! We talk about "Taking action" all day long on this forum, and you went straight to the horse's mouth on this one. Thanks and good job.

Will

Thanks

{{ DiscussionBoard.errors[2379601].message }}

Caleb Spilchen 14 years ago

@1960Texan I wish I always took action
- Thanks
Signature

Canadian Expat Living in Medellin, Colombia
{{ DiscussionBoard.errors[2379616].message }}
spearce000 14 years ago

8.25% is not that bad. In the UK we have to pay 17.5% VAT on UK based hosting -- going up to 20% in January .
- Thanks
- 1 reply
{{ DiscussionBoard.errors[2379912].message }}
- PCRoger 14 years ago
  
  Originally Posted by spearce000
  
  8.25% is not that bad. In the UK we have to pay 17.5% VAT on UK based hosting -- going up to 20% in January .
  
  (we probably have VAT headed our way, but...)
  
  Maybe you guys should study that tea party thing...
  
  And ditch the cameras while you're at it; what's it cost to run those for a year?
  
  Regards,
  PCRoger.
  
  Thanks
  
  1 reply
  
  Signature
  Track your affiliate sales back to the ARTICLE or WEBSITE that generated the sale. CBSaleTracker
  
  I was making money in days with the 4 Day Money Making Blueprint
  
  {{ DiscussionBoard.errors[2380801].message }}
  
  DenRomano 14 years ago
  
  There are several states that charge tax on services (Labor) such as Texas and Florida and if your host does not charge you now and you have a business located in those states you will have to pay sales tax to them
  
  Thanks
  
  Signature
  http://www.WadeIndustries.com
  
  {{ DiscussionBoard.errors[2380883].message }}
Don Schenk 14 years ago

And this type of "tax action" is very likely to spread to other states as the state governnents look for more way to gain money.

As it is now, here in Ohio, those of us with a vendor's license who sell physical products to various counties within Ohio are supposed to keep track of how much product was sold to people in each Ohio county, then collect sales tax on those purchases based on the tax rate in each county. The count tax rates are all different! AAAArrrrggggghhh!

Unfortunately I suspect that at some point downloadable product will fall under the eye of the various state tax bureaus, and we will all be paying sales tax on all sales.

And if we don't collect the money, we could each wind up with a very large sales tax bill the way Hostgator did.

It's a cost of doing business that we must build in to our individual systems.

:-Don
- [ 2 ] Thanks
Signature

Studies prove happier people have massively more success. It has worked for me. Use this one trick too... Click Here

Total Competition Stomper - Simply the most powerful tactic your IM or Offline business will ever use... See it here!
{{ DiscussionBoard.errors[2380973].message }}
Caleb Spilchen 14 years ago

20% Tax WOW.

I thought it was crazy when the Ontario Government introduced Harmonized Sales Tax, so now instead of paying just Government (national) tax on some products, we pay prov. as well. (8% increase or something). I guess things aren't that bad after all.
- Thanks
Signature

Canadian Expat Living in Medellin, Colombia
{{ DiscussionBoard.errors[2380997].message }}

bgmacaw

14 years ago

YouTube - Taxman -- George Harrison and Eric...

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I'm the taxman,
Yeah, I'm the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I'm the taxman,
Yeah, I'm the taxman.

(if you drive a car, car - I'll tax the street;
(if you try to sit, sit - I'll tax your seat;
(if you get too cold, cold - I'll tax the heat;
(if you take a walk, walk - I'll tax your feet.

Taxman!

'Cause I'm the taxman,
Yeah, I'm the taxman.

Don't ask me what I want it for,
If you don't want to pay some more.
'Cause I'm the taxman,
Yeah, I'm the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I'm the taxman,
Yeah, I'm the taxman.

And you're working for no one but me.

[ 2 ] Thanks
1 reply

Signature

{{ DiscussionBoard.errors[2381061].message }}

Mohammad Afaq

14 years ago

Originally Posted by bgmacaw

YouTube - Taxman -- George Harrison and Eric Clapton (live)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car - I’ll tax the street;
(if you try to sit, sit - I’ll tax your seat;
(if you get too cold, cold - I’ll tax the heat;
(if you take a walk, walk - I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for,
If you don't want to pay some more.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

I really needed that

Thanks for making my day

Thanks

Signature

â€œThe first draft of anything is shit.â€ ~Ernest Hemingway

{{ DiscussionBoard.errors[2385242].message }}

Caleb Spilchen 14 years ago

~~ The Beatles.

Good Job pointing out the song, it really does go along with this thread.
- Thanks
Signature

Canadian Expat Living in Medellin, Colombia
{{ DiscussionBoard.errors[2381065].message }}
Jerky 14 years ago

I'll wait for the name calling to begin, but...

Personally, I don't mind paying taxes for goods and services. It's a part of life for off-line businesses every day, and in a way it separates the "Get Rich Quick And Easy" guys from those giving it everything they've got.

Disclaimer: I'm not suggesting that anyone on this thread is part of the former category I listed.

Oh, and P.S.: I'd probably be surprised/ticked, too, as it's another variable to add into the business books.
- Thanks
Signature
Need a FREE Article? I need reviews. Let's help each other out - Click HERE

KILLER ARTICLES: Highest Quality, All Original Articles From A Native English Speaking Former Reporter And Magazine Writer. Satisfaction Guaranteed.
{{ DiscussionBoard.errors[2381185].message }}
Rich Struck 14 years ago

Any idiot knows you are supposed to collect sales tax when the buyer is in your state, this is just stupid. They are very lucky someone didn't go to jail.
- Thanks
- 1 reply
Signature
{{ DiscussionBoard.errors[2385037].message }}
- 1960Texan 14 years ago
  
  Originally Posted by Rich Struck
  
  Any idiot knows you are supposed to collect sales tax when the buyer is in your state, this is just stupid. They are very lucky someone didn't go to jail.
  
  Rich,
  
  It's not as straightforward as you might think. Some states don't collect sales taxes for services, which is what Hostgator provides. Add that to the fact that what each individual state does assess sales tax on changes from year to year, and can be very arbitrary. For instance, in Texas a retailer must charge sales tax on chocolate candy, but not on chocolate cake. Why? My guess is that chocolate candy sales are quite a bit higher than chocolate cake sales, which ultimately means more money for the state.
  
  Will
  
  Thanks
  
  {{ DiscussionBoard.errors[2385074].message }}

sstoney200

12 years ago

[DELETED]

{{ DiscussionBoard.errors[5435125].message }}

Joe Mobley

12 years ago

You probably will get a better response if you start your own thread with the topic you are interested in.

Good luck.

Joe Mobley

Originally Posted by sstoney200

I wonder if anyone can shed some light on a situation regarding VAT?

I live in the UK and use a hosting provider (dot5hosting) based in: St Santa Monica, CA 90405

2 years ago I purchased a 2 year plan in which they did not charge me VAT. The renewal is due in couple of weeks and now they are attempting to claim VAT on top! I queried this with them and they state:

'We apologize for the inconvenience this has caused you. We started charging the Vat for the customers from October 1, 2010. We are required to comply with the European VAT (Value Added Tax) regulations and charge customers located in the E.U. VAT, since we are non-E.U. supplier of web hosting services to these customers'

Should I be getting charged VAT from a company not based in the EU?

I know this thread is old but I come across it in Google so thought I would ask for your opinions! Thanks in advance!

Thanks

Signature

Follow Me on Twitter: @daVinciJoe

{{ DiscussionBoard.errors[5438434].message }}

spearce000

12 years ago

Originally Posted by sstoney200

'We apologize for the inconvenience this has caused you. We started charging the Vat for the customers from October 1, 2010. We are required to comply with the European VAT (Value Added Tax) regulations and charge customers located in the E.U. VAT, since we are non-E.U. supplier of web hosting services to these customers'

Should I be getting charged VAT from a company not based in the EU?

Yes, because YOU are based in the EU. Just like you have to pay VAT when you bring something into the EU from elsewhere.

In the UK we've been subject to VAT on "electronically supplied services" from outside the EU since 2003. This specifically includes "supply of websites or web hosting services", so I'm surprised you didn't get tapped for it sooner.

Read more here: HM Revenue & Customs

Online sales taxes are a thorny issue, and are only going to get worse in the future, I fear.

[ 1 ] Thanks
1 reply

{{ DiscussionBoard.errors[5441015].message }}

Kay King 12 years ago

This regulation came from catalog sales of years ago. If the catalog company had a physical store in your state, you paid state sales taxes even when ordering from the catalog.

HG has servers located in Texas - and apparently that is considered (now, at least) a "physical presence" in the state. State residents will have to pay it.

kay
- Thanks
Signature

Saving one dog will not change the world - but the world changes forever for that one dog
{{ DiscussionBoard.errors[5442613].message }}

hustlinsmoke 12 years ago

I don't think I have been charged sales tax yet. But no I will keep hostgator, they have always helped me.
--------
The bad news is that sooner or later the government will make all the web taxable. You know any thing could will be taxable sooner or later or be outlawed. One of the two.
- Thanks
{{ DiscussionBoard.errors[5438446].message }}
JeanneLynn 12 years ago

I'm in NY, I have to pay tax on almost everything I buy. Hostgator is well worth the extra money though!
- [ 1 ] Thanks
{{ DiscussionBoard.errors[5438579].message }}

Hostgator Sales Tax in Texas

Trending Topics

How do I effectively build and nurture an email list for affiliate marketing purposes?

Are Solo ADs the Most Cost Effective Way to Promote your Product?

Are billboards still effective in driving customers?

Been a while! Any of you Old Timers here?

How much does the rebranding affect CR ?