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It's time we stand up against LL and tell them they need to make SL far for everyone


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@ everyone

Actually, the real issue has nothing to do with tax.

Read that again.

The REAL issue has nothing to do with tax.

Imagine if US costs (utilities + wages + office rent) were 20-25% higher than European costs, would you pass those extra costs onto US residents alone? (Most people in this thread would probably say, "Yes, why should Europeans subsidize higher US costs.")

So you decide to charge US residents an extra 20-25% to cover those extra costs, Is that a smart business decision? You make bigger profits in the short term, but you would lose money in the long term as your US market dries up.

This is exactly what happened to LL. Most Europeans pulled their money out of SL in 2007. Many, if not most, downgraded their memberships from Premium to Free. Linden Lab lost the European market - and all the profits that once came from it.

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GoldxRazer wrote:

LL are thief's all they want is your money and they don't care if they don't run a far system if you're not in the USA you have to pay more for a full sim in the USA it's $295 in the UK it's $354 how is that far how can we all enjoy SL if they change different prices if someone out said the USA want's to run a estate they can't as there out priced this needs to be changed we all need to stand up to them and make them make SL far for everyone.

Who is this "we" you're talking about?

If you find that LL's charges are unfair to you, "make a stand" and don't pay them. If you have a premium account, drop down to basic. If you have land and you pay tier to LL, sell or abandon it. Just don't pay LL for anything. If you do pay them, and continue to pay them, then you're just blowing hot air about making a stand.

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Bit of a waste of time complaining to a foreign company about EU taxes, as many have stated.

Why not start with Adobe who seem to believe GBP £1 = USD $1 so, if they market a product in the USA for $1,000 they'll charge £1,000 for it in the UK - a markup of approximately 54%, usually for absolutely no localisation effort whatsoever.

[ETA: Plus VAT, so £1,200 total (USD $1,848), but the tax still isn't their fault.]

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I'm in the UK and I blame my government totally...they tax their own people yet allow American companies to trade here without paying tax (Starbucks, Amazon to name but a few). 

On the other side of the coin, I spend money in SL through my own choice and I'll pay whatever it is I am wiliing to pay for what I want..nobody has to actually spend any money to use  SL , so it's the users choice...don't blame LL for taxes outside of their control...get a letter off to Cameron (don't bother with Clegg he's an idiot).

 

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Summer Tison wrote:

I'm in the UK and I blame my government totally...they tax their own people yet allow American companies to trade here without paying tax (Starbucks, Amazon to name but a few).  

I totally agree. But don't forget Google. They are also BIG UK tax avoiders.

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Charly Muggins wrote:

It is possible to reclaim the VAT on SL fees if you can make a case that it contributes to the marketing effort of a business, or if your business is focused on services provided to virtual worlds.

And before Phil turns up to say "piffle", I have succeeded in doing so.

Mind you, you're not likely to get it back if selling cheap virtual furniture IS your business.

Although I'd back myself to convince the HMCE even then.

I contacted HMRC and the government when all this came about. HMRC told me that transactions that take place within a virtual world are outside the scope of VAT, so I doubt that you'd be able to convince them otherwise.

If you did convince them otherwise I suspect people with pitchforks and torches would be on your doorstep because that would be a nightmare.

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Sy Beck wrote:

Gawd this ol' chestnut again.

This was brought about by the enactment of an EU law, which was an honest attempt to stop US companies (primarily digital sales/services) who sold their wares in Europe VAT free and basing their nominal company's HQ in the lowest sales tax states in the US while European companies sellling in the US had a blanket (I forget the big % figure) imposed upon them.  Obviously not fair and another US trade barrier that had to be countered.  

The issue was that US companies could sell VAT free in Europe. Things came to a head when an ISP started making a fuss about it. If they had a charge of £10 a month for internet access, the cost to the consumer would be £11.50, an American company could charge £11 a month and the cost to the consumer would be £11.

Clearly this was a disadvantage to European based business, so a new law was enacted. The problem with how it applies to Second Life is that it creates the very discrepancy it was intended to prevent.


Sy Beck wrote:

 

So the losers are European SL users, but it's reassuring to know that US businesses and citizens are paying into the fund that provides Europeans with FREE healthcare while US SL users have to spend their profits (if any) on keeping themselves alive.

 

I'm not sure how you come to this conclusion, VAT is a tax on goods and services used within the EU, if you're ordering an item from a European company, but it's being delivered to a country such as the USA, no VAT should be charged.

 

 

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Actually...

The real issue is that online sales in the US are, in fact, taxed. However, it was the responsibility of the purchaser to file the taxes. Source: http://www.cnn.com/2013/05/06/tech/web/internet-sales-tax

To quote:

Wait, aren't we required to pay sales tax already?

In most states with sales taxes, people who buy goods online (or over the phone or through the mail) from another state are subject to a Use Tax. They are supposed to keep track of everything they purchase and pay sales taxes when they file their tax return. Many consumers either ignore or are not aware of these requirements, and states say it is difficult to enforce.

So, whenever someone online, depending on state of course, purchased something and their state had a use tax, they were supposed to voluntarily pay the taxes. Now, physical retail outlets are sick of getting the shaft, and the US will soon try to nationalize some rules for the sales tax issue.

Linden Labs never factored in any form of sales tax on its pricing... because there is no unified sales tax on anything. If they did, it would need to show as a line item on the receipt. Likely they did not charge at first (and others don't) because they are operating on the current US model for sales tax for internet goodds, IE that it's the user's responsibility to pay out that tax unless the home state for where the service is located is required to collect that tax.

So yea, sucks that England already legislated taxation via internet, but that's the breaks. US is going to follow soon enough, but it will be interesting to see how as sales tax is state controlled...

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Theresa Tennyson wrote:

(If you think all that's confusing, do NOT, I repeat do NOT, move to Missouri. The city I live in not only has a higher sales tax than the rest of the state, it VARIES DEPENDING ON WHAT PART OF THE CITY YOU'RE IN.)

Finally, sales taxes are almost never levied on services, only on the purchases of physical goods. I don't see how any of the base tier fee could be considered a tax that non-US citizens wouldn't be liable for.

Just wanted to say that was a great explanation of US sales taxes and WHOA on your city.  I've never heard of different sales taxes within the same city.  :matte-motes-agape: 

To follow up on this for non-American readers - I live in FL which has no separate state tax, unlike many states.  Our major commerce is tourism so (at least the theory is) that tourists spend a lot of money in FL and pay sales tax on purchased goods; the same one FL residents pay.  A friend of mine moved from FL to Virginia years ago and she was dismayed at all the various taxes there - she said they literally tax everything.  So what various taxes one pays in the US depends upon the state (and apparently part of the city where Theresa lives) in the US.

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Madelaine McMasters wrote:

 

It's much the same for purchases from Amazon. They sell me products for less than I can obtain them locally because they are not (yet) obligated to collect the 5.6% Wisconsin tax on sales to me. I am, however, obilgated to pay sales tax out of state purchases. So I must keep track of my receipts and submit the appropriate taxes to the Wisconsin State Treasury every April 15.


Amazon is opening a warehouse in Florida scheduled for 2016 which means Floridians will then have to pay sales tax for Amazon purchases.  As you can see by the linked article...not everyone is thrilled with this.

A quote from the article as it pertains to this thread:

Previously, Florida residents could shop Amazon without having to pay 6 percent tax on purchases thanks to a 1992 U.S. Supreme Court ruling that an Internet company would be forced to collect sales tax only in states in which they have a physical presence.

 

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Dillon Levenque wrote:

I thank you for bringing that to everyone's attention. I see others have pointed out that there is no National Sales Tax—for the love of God! Isn't the Income Tax bad enough?—so I'll just go with the tea tax.

I've an ancestor who arrived in Boston in the 1770's as a teen. Got excited with all the commotion and was at least a member of the Sons of Liberty, but not one who made a lot of noise from all appearances. His saved memoirs/letters indicate he actually witnessed the Boston 'Massacre' (bit of an overstatement but then newspeople never change). A vanity-published biography by one of his grandsons told how his sons all claimed he was at the Boston Tea Party, The ancestor himself made no such claim, but in fact he did move in pretty impressive circles, especially in the years after the war.

I've always liked this dramatic retelling of the Boston Tea Party story.

 

I'd never heard that, Dillon, thank you for posting. :)  (Still want to post The Battle of New Orleans...heh.)

My ancestors were largely Irish.  I haven't done a geneology but I would guess that somewhere along the lines one of my ancestors left Ireland for America to not be indentured servants to the Crown.

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Taxes, taxes everywhere!

Just singling out VAT or any tax in general gives a skewed view of what is going on.  VAT and Sales Taxes are highly visible because they are added to your purchase price.  But there are all the hidden taxes that affect the cost of goods and services.  Real Estate taxes.  Income Taxes.  Country by Country we could generate lists of all the things that are taxed that are added into the final cost of a product.

Here in the U.S. we 'celebrate' Tax Freedom Day, the first day of the year in which a nation as a whole has theoretically earned enough income to fund its annual tax burden.  This year in the U.S. it was Five Days Later than last year.  In other words, we worked five more days this year to pay our tax burdens.

A better way to look at the issue is to compare Cost of Living because it will take into account all the hidden taxes, etc, that affect us.

Cost of Living Comparison Between United States and United Kingdom (pops)

 

Indices Difference **Only uploaded images may be used in postings**://www.numbeo.com/images/information.png" border="0" alt="Info" />
Consumer Prices in United Kingdom are 24.20% higher than in United States
Consumer Prices Including Rent in United Kingdom are 21.72% higher than in United States
Rent Prices in United Kingdom are 15.94% higher than in United States
Restaurant Prices in United Kingdom are 35.93% higher than in United States
Groceries Prices in United Kingdom are 11.34% higher than in United States
Local Purchasing Power in United Kingdom is 32.79% lower than in United States

 

While it is true that there are U.S. based businesses taking advantage of taxing situations, businesses every where do what they can to avoid paying taxes.  And I know that there are things businesses do here that affect the cost of living elsewhere.  We are not all angels here.

We get up in arms about tax increases here as well as other things that affect our cost of living.  If I lived over there I might be going ballistic with the Govt.  

Is it "unfair" that LL has chose not to absorb the VAT?  Maybe because of the affect it has on Users in other Countries.  But the question would still remain, why would they be obligated to?  They were not the ones who levied the tax.  So why should they be the ones who have to eat it?

Looking at the chart above, it looks like the Govt there is doing a better job of ripping off the Citizens than ours is.  I hope my Govt doesn't start taking lessons from yours.

 

this reply is meant more in general than as a tag to Phil's post

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KarenMichelle Lane wrote:


GoldxRazer wrote:

LL are thief's all they want is your money and they don't care if they don't run a far system if you're not in the USA you have to pay more for a full sim in the USA it's $295 in the UK it's $354 how is that far how can we all enjoy SL if they change different prices if someone out said the USA want's to run a estate they can't as there out priced this needs to be changed we all need to stand up to them and make them make SL far for everyone.

hops on my Bed, Bath & Beyond Soapbox...

I live in California and I don't want Linden Research to be farther away.
:P

hops off my Bed, Bath & Beyond Soapbox...

I just got that. :matte-motes-bashful-cute:

I vote this the best comment on being "far. ;)

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JonathonAnthony wrote:

Actually...

The real issue is that online sales in the US are, in fact, taxed. However, it was the responsibility of the purchaser to file the taxes. Source: 

To quote:

Wait, aren't we required to pay sales tax already?

In most states with sales taxes, people who buy goods online (or over the phone or through the mail) from another state are subject to a Use Tax. They are supposed to keep track of everything they purchase and pay sales taxes when they file their tax return. Many consumers either ignore or are not aware of these requirements, and states say it is difficult to enforce.

So, whenever someone online, depending on state of course, purchased something and their state had a use tax, they were supposed to voluntarily pay the taxes. Now, physical retail outlets are sick of getting the shaft, and the US will soon try to nationalize some rules for the sales tax issue.

Linden Labs never factored in any form of sales tax on its pricing... because there is no unified sales tax on anything. If they did, it would need to show as a line item on the receipt. Likely they did not charge at first (and others don't) because they are operating on the current US model for sales tax for internet goodds, IE that it's the user's responsibility to pay out that tax unless the home state for where the service is located is required to collect that tax.

So yea, sucks that England already legislated taxation via internet, but that's the breaks. US is going to follow soon enough, but it will be interesting to see how as sales tax is state controlled...

Actually..... that legislation has not passed the house to my knowledge so their is still no sales tax.  It is unlikely to pass the house from what I read as a majority of republicans are against it.

As to the rest, LL is providing a service not physical goods.  Not all states charge tax on services.  The states that don't would have to pass laws taxing virtual goods before they could collect any.

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This is an old, old argument.    As far as the EU is concerned, all payments for tier we send to LL are net of VAT at whatever the local rate is where we're sending the payment from.   

So LL has the choice of billing us Brits at $295 a month, same as the Americans, and having HMRC claw back $49.17 of that as VAT (so LL only receive $245.83), or billing us at $295 plus VAT each month.    They tried carrying the VAT for a while, a few years ago, but it must have become prohibitively expensive.

I don't like having to pay the extra any more than do you, but I can quite see why LL don't want to put themselves in a position where they receive ~20% to ~25% less revenue from a sale to an EU customer than to an American one.     They've got a business to run, remember.

It's easy enough to find a way round it, if you need to.    My US-based business partner and I simply have all our lands in her name (we've been good friends for a long time and we trust each other).   Alternatively, you can probably find a large land baron from whom to rent a full sim at a rate roughly equivalent to $295/month (the very large estates get preferential terms from LL, so they can afford to do this).

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Czari Zenovka wrote:

  A friend of mine moved from FL to Virginia years ago and she was dismayed at all the various taxes there - she said they literally tax everything. 


Just to clarify, this is not true.  I live in Virginia and there is no sales tax on a number of categories of items, food and medicine being one.  The state even has 'tax holiday' periods where items for a stated purpose are not taxed at all when they normally would be.  For example there is a tax holiday period for back to school goods, including clothing in August, as well as a tax holiday for 'hurricane preparedness' in the beginning of the season.  There is no tax at all on internet sales unless you buy physical goods from a company that has a brick and mortar presence and those goods are taxed in Virginia.

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Amethyst Jetaime wrote:


Czari Zenovka wrote:

  A friend of mine moved from FL to Virginia years ago and she was dismayed at all the various taxes there - she said they literally tax everything. 


Just to clarify, this is not true.  I live in Virginia and there is no sales tax on a number of categories of items, food and medicine being one.  The state even has 'tax holiday' periods where items for a stated purpose are not taxed at all when they normally would be.  For example there is a tax holiday period for back to school goods, including clothing in August, as well as a tax holiday for 'hurricane preparedness' in the beginning of the season.  There is no tax at all on internet sales unless you buy physical goods from a company that has a brick and mortar presence and those goods are taxed in Virginia.

You should try Illinois:

"SPRINGFIELD — Illinois has too many units of government, at least according to Illinois Sen. Terry Link, a Waukegan Democrat.

Link is behind a plan that would eliminate or consolidate some of Illinois' nearly 7,000 taxing authorities. Illinois leads the nation with the number of taxing bodies. Pennsylvania is No. 2 on that list with about 4,900 taxing districts, according to the U.S. Census Bureau." 

"Taxing authorities include park districts, townships, counties and even mosquito abatement districts."

 Link Pops

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Amethyst Jetaime wrote:


Czari Zenovka wrote:

  A friend of mine moved from FL to Virginia years ago and she was dismayed at all the various taxes there - she said they literally tax everything. 


Just to clarify, this is not true.  I live in Virginia and there is no sales tax on a number of categories of items, food and medicine being one.  The state even has 'tax holiday' periods where items for a stated purpose are not taxed at all when they normally would be.  For example there is a tax holiday period for back to school goods, including clothing in August, as well as a tax holiday for 'hurricane preparedness' in the beginning of the season.  There is no tax at all on internet sales unless you buy physical goods from a company that has a brick and mortar presence and those goods are taxed in Virginia.

It wasn't sales tax, I should have clarified that, it was something about tax to own a car or some sticker they had to buy for their car and a few other of those types of things. It was a long time ago so foggy on the details, just a slight shock from what she was used to in FL.  Must not have deterred her - she still lives there. :)  We have the tax holidays as well (I always thought they were national, but maybe not).

Virginia is one of my favorite states - I used to take regular vacations up the coast and stayed in Virginia Beach...went to Colonial Williamsburg, and then to Alexandria to make my "home base" to explore D.C.

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Summer Tison wrote:

Yeah the cost of living may be higher here in the UK...but I still like living on this little rock, better the Devil you know  and all that....

I'm quite happy paying VAT if it means my kids have a HUNDRED times smaller chance of being killed in school by a lunatic with a gun.

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