There's tax on apps?

Discussion in 'iOS Apps' started by isephmusic, Dec 27, 2012.

  1. macrumors 6502

    Oct 31, 2012
    are you kidding me ? in google play you pay 99 cents its NINTY-NINE cents not a dollar+.06, what does that even accomplish. so if you pay a 25$ app like the big cloud/ office apps will it charge you that extra 7% tax ? thats kind of rediculous who does it go to and why does android not require it but iOS does ?
  2. macrumors 603


    Aug 19, 2008
    The Anthropocene
  3. macrumors 603


    Aug 4, 2011
    That's how sales tax works. Always has. From toilet paper at the general store to gadgets online. State regulation. Talk to your representative.

    No tax on my iOS apps.
    Where are you located?
  4. macrumors 68040

    Oct 21, 2012
    Depends where the transaction takes place. If you buy a 10p sweet - 1p of it will be tax - all purchases are taxed, regardless of size (unless it's considered an essential/exempt item - and I don't think an "app" is classed as an essential)
  5. macrumors 6502a

    SnowLeopard OSX

    Dec 5, 2012
    "There are two things you can't avoid in life -- death and taxes."
  6. macrumors 603

    Feb 4, 2008
    Did the OP just wake up inside some Internet bubble and never buy anything from an actual store? Are we really asking what sales taxes are for? Really?
  7. thread starter macrumors 6502

    Oct 31, 2012
    i know what tax is for im asking WHY is the app store is taxed and not the android one. why the difference ? just curious

    haha im not used to paying tax because

  8. macrumors regular

    Apr 15, 2012
    So which states have sales tax in iTunes or App Store ? Is it the case that some states don't have this tax component?

    I heard CA residents will now have tax on amazon purchases starting 2013 but not sure if its really true.
  9. macrumors 6502


    Sep 20, 2012
    I don't pay tax. :D
  10. jazzbo, Dec 27, 2012
    Last edited: Dec 27, 2012

    macrumors member

    Oct 11, 2008
    Bangor, ME
    Generally catalog (on-line, phone or by mail) retailers are required to collect sales tax if they have a physical presence in the same state as the purchaser, based on your billing address usually. Otherwise you get into issues of taxing interstate commerce which can be dicey, and why there is occasionally a move in Congress to tax internet sales.

    Is there an Apple Store in your state? You'll get taxed in the app stores or other online purchases from Apple.

    Does Google have offices in your state? If not, they probably won't collect tax.

    Amazon has generally been trying to dodge collecting taxes but my understanding is they generally will in states where they have offices or warehouses.

    btw, even if the retailer isn't collecting sales tax, law in your state may mean that you should be declaring a use tax as part of your tax return each year.
  11. macrumors 68020


    Nov 3, 2011
    Yes, it's true and it started late this year. Items purchased in CA while living in CA will have CA tax. Amazon has where-houses in CA.
  12. macrumors P6


    Aug 17, 2007
    Agreed, and the taxes part is only going to get worse.
  13. macrumors 6502

    Oct 18, 2012
    By law, even though Amazon doesn't charge you tax in your state, you are still supposed to file and pay that tax directly to your state. That being said, not many people do it.
  14. thread starter macrumors 6502

    Oct 31, 2012
    when taxes are due early next year where would i even put it ? i buy A LOT from amazon because of the free shipping and no tax. would i add it all up ? or is it individual. sorry im a young guy.

    but back to the main point. does anyone in any state pay tax on google apps ? i really dont think so and im not sure why the app store in the iOS would charge tax on an app
  15. macrumors 68040

    Nov 6, 2008
    The most populated city in the planet
    From the math, I assume NJ - 7% sales tax. Though many other states could have it but I only know of NJ.
  16. macrumors 65816


    Feb 1, 2002
    Google probably doesn't have a physical location in your state, hence no tax. That will probably change in the future, ebcause taxes on internet purchases I think are going to have to happen eventually.

    And yes, your state tax return likely has a place where you total up all your receipts and enter them as a "use tax". California does anyways. no one actually pays it, but legally youa re required to. This is why california moved to force amazon to collect CA state sales tax (as have other states).
  17. macrumors 68030


    May 21, 2010
    It's called Use tax. It is sales tax that you should have paid on a purchase but because the seller is not obligated to collect it (they don't have a physical presense in your state). Very few, if any, states enforce its collection from individuals. However, businesses are routinely audited. Businesses will file a sales and use tax return to report sales tax they collected as well as sales tax they were not charged (use tax).

    Depending on your state, apps may or may not be subject to sales tax. In PA, they're considered canned software and are subject to tax.

    Incidentally, Amazon just recently began charging sales tax to PA customers because they apparently have established distribution hubs in the state, thus establishing nexus. Sucks for me. Now I have up decide whether its worth driving to Delaware to avoid the tax.

    Back to your question, though, don't bother paying the use tax to your state, they won't come after you. Apple has to charge tax on Apps because they have a physical presense in the state.
  18. macrumors member

    Oct 11, 2008
    Bangor, ME
    Here in Maine, the income tax form has a 'recommended calculation' of use tax where they take some small % of your net income, or you can declare an exact amount.

    If you go multiple years just filling in 0 in the box, you get a 'compliance letter' from the state offering to settle for a certain amount, but I've never heard of anyone getting any type of legal response for not paying. We have ads on TV every now and then reminding people to declare their use taxes.

    Subsequently, we have the highest use tax reporting rate at around 10% of tax filers: Nationally it is like 1.6% of taxpayers declare use taxes.
  19. macrumors 68000

    Aug 25, 2011

    Incorrect. I live in a state where Apple has no presence, but they add a sales tax on every purchase. Apple chooses to apply the state sales tax for every state that has one. Google and amazon choose not too. Honestly, I think they should. The money is used by your state to fund education, road work, snow removal and so on. I live in a state with no income tax, and the sales tax is what funds these projects.
  20. macrumors Nehalem


    Apr 16, 2008
    At the iPhone hacks section.
  21. macrumors 603

    Feb 4, 2008
    Some states are starting to pass laws taxing online sales. Retailers such as Walmart are rightly pissed that they get punished for having an actual store. But laws have to get passed to do it since its still uncharted territory.

    As for why the App Store is and Amazon isn't, that's strange. Must be a quirk of the local law. Maybe it has something to do with Apple having physical stores and Amazon not.
  22. macrumors member

    Oct 11, 2008
    Bangor, ME
    Are you sure Apple doesn't have a presence? Very often their educational contracts -- i.e. having a dedicated store at a university or a depot for a local school district, often will be enough to make the nexus.

    Or is that some statement somewhere that says that Apple collects for every state, just because. I have heard of no retailer doing that voluntarily and I'm very surprised that Apple would. I really think it is because Apple has a bigger presence that many of us realize. Why don't they collect local taxes on top of that -- and stop at just the state level?
  23. macrumors 68030

    From A Buick 8

    Sep 16, 2010
    Ky Close to CinCinnati
    what state you in op
  24. macrumors 603


    Aug 5, 2010
    That's an unusual area. Online retailers still have to charge sales tax if they have a physical presence in your state. If they lack one, you're technically still liable for applicable "use tax" which is the same amount as you would have paid in sales tax. Generally in countries where sales tax is applied at a national level, the stated price is sales tax inclusive. Sometimes they still price things to the nearest .99, and when you look at your receipt you'll see how much was sales tax. The odd thing about apps is that in some cases with certain states, non-tangible items are not considered sales taxable assuming they aren't accompanied by tangibles. It's a weird mix and this varies according to the laws of your state of residence and where the seller is set up. In the end retailers aren't going to charge you sales tax unless they feel it is required, and they do not profit from it. If anything it's an added expenses accounting for it.
  25. macrumors 68000

    Aug 25, 2011
    They have been collecting sales tax since I can remember. I live in South Dakota. The only presence Apple has here is best Buy. lol

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