US Residents to begin paying Sales Tax

[Persephone Emerald]

I haven't read the comments yet, but wanted to respond.

Blaming sale tax is disingenuous of Linden Lab. The court ruling in question was in 2018, so this is not a new development. In the meantime they've been charging us increased fees on linden dollar buys and exchanges, so those increased fees have already been paying for these expenses. This is just another way to squeeze more money out of the residents who pay to play in SL.

[Silent Mistwalker]

23 minutes ago, Drake1 Nightfire said:

Just to point out, we have two states that are bigger than any single European country. California is bigger than all but Spain, France and Ukraine. 

Seeing as our whole country has double Russia's population and is over twice the size of the entire EU, I would say having different sales tax per state makes sense. Does the EU have the same taxes across each country? 

Don't forget Alaska is much larger than Texas and Texas is larger than California.

[Sid Nagy]

2 hours ago, Drake1 Nightfire said:

 Does the EU have the same taxes across each country? 

Nope. Each country has their own tax system. Sales tax included.
But on the other hand, the EU is not a country, the USA is.
The EU is a coalition of independent countries that have agreed to work closely together, so that there is a free trade of goods between all members and free movement of people within the EU.
So a lot of rules in each country are synchronized but even more aren't.

Citizens don't pay EU taxes.
The EU is financed by the individual member states, depending on the number of people that live in the country and the size of its economy. Rich states pay a bit more, poor states a bit less.
 

Edited March 1, 2022 by Sid Nagy
Small text improvements.

[Persephone Emerald]

24 minutes ago, Silent Mistwalker said:

Don't forget Alaska is much larger than Texas and Texas is larger than California.

In this situation it's the size of the population, not the size of the landmass, that matters. California has the largest population at 38 million ,with a state sales tax of 7.25 %. New York has the second largest population at 20 million, with a state sales tax of 4 %.

This works out to a significant amount of money that Linden Lab will be saving by charging us these fees - not unlike how utilities do the same with nickel and diming us on various fees and taxes added onto our bills. 

Edited March 1, 2022 by Persephone Emerald

[Anna Salyx]

43 minutes ago, Chic Aeon said:

Hope that makes sense. Just waking up.  

It does.  I simply missed the full scope of your comment. My approach is that to do anything with linden dollars is always going to incur a labor* of conversion somewhere along the line, either on the Resident side, or the Lab side and my belief that is the Lab is always going to require the resident to do the labor if they wish to exercise that option.  There might have been talks in the early days for the Lab to take on the labor (as they have with US sales tax) but it's not always a workable solution, as is being see with the shifting of the labor back to the Resident for the taxes on some transactions with more shifting coming in the future. But I do get your meaning now and, yeah, I don't think that that particular option will ever come to pass.  Sadly.

 

*labor meaning: act, burden, onus, requirement, duty, obligation, expectation, etc.

[Rolig Loon]

49 minutes ago, SarahKB7 Koskinen said:

@Rolig LoonRussia, Canada and China are all larger (in area size) than the United States and all have national sales taxes. Using country size to not have a national sales tax is just a poor excuse.

Oh, I didn't say it was an excuse.  I was offering an explanation. Logical or not, each country moves forward from crisis to crisis, dragging its history behind it.  Our history gave local groups of people a lot of control over things like taxes rather than leaving it to decision makers at a great distance.  One might argue that the idea made more sense 250 years ago, when the population was smaller and sparser, than it does today.  Or not.  As I said before, our system is what it is.  Like other systems around the world, it works reasonably well, at least until you get to poking at the details.

[Paul Hexem]

1 hour ago, Persephone Emerald said:

I haven't read the comments yet, but wanted to respond.

Blaming sale tax is disingenuous of Linden Lab. The court ruling in question was in 2018, so this is not a new development. In the meantime they've been charging us increased fees on linden dollar buys and exchanges, so those increased fees have already been paying for these expenses. This is just another way to squeeze more money out of the residents who pay to play in SL.

This is worth repeating.

Their profit margin on land has always been insanely high, and they already added extra fees more than once.

[Drake1 Nightfire]

1 hour ago, Silent Mistwalker said:

Don't forget Alaska is much larger than Texas and Texas is larger than California.

That would be one of the two i mentioned.. Texas and Alaska are bigger than any single European country. 

[LittleMe Jewell]

7 hours ago, Finite said:

I would guess only  a state tax would apply considering the US doesn't have a flat, across the board sales tax. 

The blog post specifically says "more than 13,000 sales and use tax jurisdictions in the United States" - which is because they have to take into account every STATE tax as well as every LOCAL/CITY/COUNTY tax.

That is a large part of the reason that so many online companies fought for a long time to continue to be exempt from sales tax.  It adds a lot of burden on the company to keep track of all of the rules across every locale in the US.  As more and more sales of items went from local brick & mortar stores to online stores, the various locales were seeing a decrease in sales taxes coming in and pushed more and more for the online places to have to collect & remit the applicable sales tax.

The way I read the blog post, LL has been paying these taxes all along, but no longer want to absorb them and thus will be passing them on to us, the consumer.  The only real difference between this and Amazon is defining exactly what gets taxed and what doesn't.  Anything purchased with L$ is in-game token stuff, but the purchase of anything with RL money could be on the table for taxing.

[Sid Nagy]

46 minutes ago, Drake1 Nightfire said:

That would be one of the two i mentioned.. Texas and Alaska are bigger than any single European country. 

Size is not important in all matters.

And this is, certainly in these modern times with modern communication and payment systems, not really relevant to the discussion IMHO.

Edited March 1, 2022 by Sid Nagy

[Axel UwU]

Looks like according to this Hawaii has a 4% sales tax.

 

https://www.tax-rates.org/hawaii/sales-tax

[LittleMe Jewell]

6 minutes ago, Axel UwU said:

Looks like according to this Hawaii has a 4% sales tax.

 

https://www.tax-rates.org/hawaii/sales-tax

Yes, though with local sales taxes, it could be up to 4.5%

[Syo Emerald]

You'll be fine. All of your sales taxes sound like absolut heaven on earth. So low...

[Silent Mistwalker]

2 hours ago, Persephone Emerald said:

In this situation it's the size of the population, not the size of the landmass, that matters. California has the largest population at 38 million ,with a state sales tax of 7.25 %. New York has the second largest population at 20 million, with a state sales tax of 4 %.

This works out to a significant amount of money that Linden Lab will be saving by charging us these fees - not unlike how utilities do the same with nickel and diming us on various fees and taxes added onto our bills. 

You're obviously not an accountant and didn't get the joke. Oh well.

[Asadora Summers]

45 minutes ago, Syo Emerald said:

You'll be fine. All of your sales taxes sound like absolut heaven on earth. So low...

You're right - VAT is def higher than any combined state + local (city/county) tax. I'm in Tennessee: State tax is 7% my city tax is 2.5% making the total sales tax for me 9.75% - far lower than the current VAT which is what, 20%?
I'm not complaining, knew this day would come but just not anytime /this/ year lol

[Silent Mistwalker]

2 hours ago, Drake1 Nightfire said:

That would be one of the two i mentioned.. Texas and Alaska are bigger than any single European country. 

Problem is Alaska is nearly deserted population wise. And Texas... well, there's good reason why I don't live there any more.

[Silent Mistwalker]

1 hour ago, LittleMe Jewell said:

The blog post specifically says "more than 13,000 sales and use tax jurisdictions in the United States" - which is because they have to take into account every STATE tax as well as every LOCAL/CITY/COUNTY tax.

That is a large part of the reason that so many online companies fought for a long time to continue to be exempt from sales tax.  It adds a lot of burden on the company to keep track of all of the rules across every locale in the US.  As more and more sales of items went from local brick & mortar stores to online stores, the various locales were seeing a decrease in sales taxes coming in and pushed more and more for the online places to have to collect & remit the applicable sales tax.

The way I read the blog post, LL has been paying these taxes all along, but no longer want to absorb them and thus will be passing them on to us, the consumer.  The only real difference between this and Amazon is defining exactly what gets taxed and what doesn't.  Anything purchased with L$ is in-game token stuff, but the purchase of anything with RL money could be on the table for taxing.

Just to be clear, it is city, county and state. City and county are considered local as far as taxes are concerned.

[Sid Nagy]

1 hour ago, Syo Emerald said:

You'll be fine. All of your sales taxes sound like absolut heaven on earth. So low...

But we get an awful lot of good infrastructure, affordable healthcare, subsidized cultural programs, museums and theaters, good sports facilities, affordable education, reasonable social security, etc. back for our higher taxes as well.
I don't mind paying a lot of taxes, as long as the benefits for everybody are good enough.

Damn, I wish I had to pay 4 million euro in taxes this year.

Edited March 1, 2022 by Sid Nagy

[Persephone Emerald]

3 hours ago, SarahKB7 Koskinen said:

 

 Please do not confuse Europe the continent with the European Union (EU), they are very different things. Despite having a flag and an anthem, the EU isn't a country, its only a political and economic organisation with 27 member countries within it.

There are a total of 44 countries in the continent of Europe, with 27 of those in the EU and 17 not in the EU.

As for population, there are a total of 750 million people in the continent of Europe, with 447 million of those living in EU countries and 303 million not. The US has a total population of 332 million.

The area size of the total European continent is 3.931 million mi², with the EU taking 1.634 million  mi² of that.   The US area size s 3.79 million mi².

I think it makes sense to think about the United States as being similar in size and variable environments to the continent of Europe, but being similar in terms of government and culture to the EU. All 50 states of the USA use the same currency and share many of the same laws, the same broader military, and the same government body for making war or treaties with other countries. Each of these 50 states has it's own culture, food specialties, dialects, state and local laws, National Guard forces, and ability to make trade negotiations with other states. This is how some states trade in water and energy resources, yet disagreements come up between what aspects of law can be regulated by State law and which need to be regulated by Federal law.

[LittleMe Jewell]

2 minutes ago, Silent Mistwalker said:

Just to be clear, it is city, county and state. City and county are considered local as far as taxes are concerned.

I phrased the LOCAL/CITY/COUNTY that way to include all of the ways that people were referring to their non-state taxes here.

To be all-encompassing, the applicable tax would actually be the sum of the city, county, state and special districts. That 'special district's part can easily add a few more percentages to the sales tax, depending on how many are applicable to you.

[Silent Mistwalker]

5 minutes ago, LittleMe Jewell said:

I phrased the LOCAL/CITY/COUNTY that way to include all of the ways that people were referring to their non-state taxes here.

To be all-encompassing, the applicable tax would actually be the sum of the city, county, state and special districts. That 'special district's part can easily add a few more percentages to the sales tax, depending on how many are applicable to you.

Special districts are a form of local government. They are created by their constituents to meet specific service needs for their communities. Most perform a single function such as water delivery, fire protection, wastewater or cemetery maintenance, to name a few. Some, like county service districts, provide multiple services.

 

In my state special districts are:

• Airport
• Cemetery Maintenance
• County Service
• Diking
• Domestic Water Supply
• Drainage
• Emergency Communication
• Fire Protection
• Geothermal Heating
• Health
• Heritage
• Highway Lighting
• Irrigation
• Library
• Mass Transit
• Metropolitan Service
• Park and Recreation
• People’s Utility
• Ports
• Predator Control
• Radio and Data
• 9-1-1 Communications
• Road Assessment
• Sand Removal
• Sanitary
• Soil and Water Conservation
• Special Road
• Transportation
• Vector Control
• Water Control
• Water Improvement
• Weather Modification
• Weed Control

 

Every bit of it falls under government: state, county or city. It's all state, county or city taxes. You are taxed by the government, for the special districts. 

[SarahKB7 Koskinen]

4 hours ago, Drake1 Nightfire said:

Texas and Alaska are bigger than any single European country. 

Wrong. 23% of Russia (and most of its population) is on the European continent and has an area of 1.5 million mi²., The other 77% of Russia, divided by the Ural mountains, is in Asia.  European Russia is larger than any of the US states.

In fact, European Russia is larger than the 6 largest US states combined ! (Alaska, Texas, California, Montana, New Mexico and Arizona = 1.47 million mi²).

Edited March 1, 2022 by SarahKB7 Koskinen

[Setsuki Takeda]

15 hours ago, Alwin Alcott said:

hmm.. my household is in boxes to move already, i might change the location to one of those  

You tend to end up paying the same if you actually live there, like Oregon has no sales tax but their property taxes are higher than Washington...

 

Still cheaper than California, though

[Sid Nagy]

1 hour ago, Persephone Emerald said:

I think it makes sense to think about the United States as being similar in size and variable environments to the continent of Europe, but being similar in terms of government and culture to the EU. All 50 states of the USA use the same currency and share many of the same laws, the same broader military, and the same government body for making war or treaties with other countries. Each of these 50 states has it's own culture, food specialties, dialects, state and local laws, National Guard forces, and ability to make trade negotiations with other states. This is how some states trade in water and energy resources, yet disagreements come up between what aspects of law can be regulated by State law and which need to be regulated by Federal law.

There are many differences between the structures of the USA and the EU if you look a bit closer:

• The EU is not a country. The USA is.
• All EU countries are independent nations.
• Each of them has an own head of state. Some are powerless royals, some are powerless presidents, some have a president with political power like the one in the USA (France for instance). In most EU countries the parliaments are the center of political powers.
• The EU parliament isn't very powerful at all. The meetings of the political leaders of the countries is far more powerful. So politics on EU level are very indirect.
• The EU has no collective army.  The USA has.
  The only collective structure is partly NATO.
  Not all EU members are NATO members.
• The EU has no collective taxes. The USA has.
• The EU has no collective foreign policy or minister.
  Each country has its own foreign policy.
  There are discussions in the EU and when possible they talk with one voice.
• There has to be an overwhelming majority among the member countries before new EU legislation can get effective. And in most countries it has to be ratified by the countries parliament first.
• There are huge cultural differences between the EU countries.

TLDR: The USA and the EU are not that similar in terms of government and culture as it seems at first glance.

[MajikVixen Lorefield]

...So we're all changing our credit card billing addresses to mailboxes we now have in the tax exempt states that we're moving to, right? 

 

I am just confused on specifics, and waiting for either Tilia or LL to respond further (it might be a game of passing the buck at the moment)... 

You guys are saying that it not only depends on state, but county, city and all that?  I actually called the California Department of Tax and Fee Administration (as that's the state I'm concerned about), and both advisors, especially the one at headquarters in Sacramento said there are no taxes on electronic transactions for non-tangible items.  She said they referred to it as "TPP."  She referred me to "prewritten software" section "(D)" for Regulation 1502: https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1502.html 

...But then, this page https://www.salestaxhandbook.com/california/sales-tax-taxability, that Drake1 Nightfire posted, says that "Canned Software - Delivered on Tangible Media" and "Customization of Canned Software" are taxable in CA.  I guess that means that if you actually use the official Second Life Viewer, you are subject to a taxable loop-hole???  Pfft.  I loathe the SL viewer and have only used it when Premium Chat blamed our lack of group communication functionality moving to the cloud on not using their official viewer.  0.o  Other than that, it was to reinstate cache/inventory issues with the previous potato laptop.  Sincerely.  ...But I guess as 3rd party developers work with LL to make viewers, we'd still be subject to a tax for that, if that's all true.  *shrug*

 

And BTW, I don't know about you all, but I would like to just comment that if SL is a place where you can be anything you want and do anything you want (as it allows for anonymity), running into this type of petty tax money stuff being passed onto the consumer certainly tarnishes my escape from reality after 13 years of mostly favorable awesomeness.  I might even go so far as to say it's geographical discrimination, LOL!

Lastly, I also think that if you are utilizing SL as a way to experience life outside of your real life situation, where you're otherwise something like a veteran, senior, or disabled... you should be federally tax exempt.  A lot of businesses offer discounts for such, so if this is going in that direction, LL ought to consider that, as I believe one of the reasons why virtual reality was created, was to improve the lives of such.  I mean, it's true, the entertainment value brings in the revenue, but honestly, if you're bedridden, SL is an improvement on that type of living situation.