US Residents to begin paying Sales Tax

[Sid Nagy]

On 2/28/2022 at 11:31 PM, Chic Aeon said:

Now would be a LOVELY time to let citizens pay for Premium (or Premium Plus) with linden dollars.   Just saying.

 

I would happily pay with some of my linden dollar collection.  Not paying with US :D.  I can't be alone in this as I know a bunch of folks who quit when the linden to USD changes happened. 

 

The bills and wages LL has to pay are unfortunately in USD, so that is what they want.
They would shoot themselves in the foot by accepting a game currency that they print themselves.

[Silent Mistwalker]

1 hour ago, LittleMe Jewell said:

I'm assuming "it depends".

No need to assume. This is correct. It does depend on where you live/do business from and where you are shipping to.

Edited March 3, 2022 by Silent Mistwalker

[Syo Emerald]

11 hours ago, Anna Salyx said:

We have a few incidentals that aren't called taxes but are in fact are functional are taxes that make up for it. So we're not really that much better off tax wise as some other countries with flat VAT taxes. My insurance premiums, deductible, and copay taken together (if i have a moderate amount of medical/dental/optical) events can come to around  to be a10 to 15% or more "tax" on my income for example and a bad illness could still bankrupt me (and heaven forbid I need an ambulance). (not really relevant to the sales tax talk but a point of perspective).

Our health insurances feel like taxes aswell. They get deducted from the salary along with all real income related taxes before its paid out to the bank account. Of course, the given security is greater, than in the US (I can't be bankrupted directly) and the cost is lower in most circumstances.

 

[Chic Aeon]

6 hours ago, Sid Nagy said:

The bills and wages LL has to pay are unfortunately in USD, so that is what they want.
They would shoot themselves in the foot by accepting a game currency that they print themselves.

Agreed UNLESS the cost of the 3rd party tax service plus any Linden employee extra hours comes into play.   I have no idea what that cost would be but I do know other websites using 3rd party services such as this -- and some of those  services  are pricey. 

Also, as we all well know mainland is getting more deserted every day. Perhaps the new "Premium" membership will help deal with that, but if not, letting folks pay with linden dollars would likely help that issue.  Both land and rentals are getting much cheaper (not in all cases of course) and two of my favorite rental areas (many many sims) have closed in this last year after long runs. So there ARE other things to take into consideration.

Just looking at ALL the land ads on the forums these days is a hint at the big picture. 

I don't expect The Lab to do this -- but then again, I have no ideas of the costs in column A and column B or any other pertinent info that might influence. I only know that at one time it was being considered for some reason. 

[MajikVixen Lorefield]

Alright...

Hey Google, what states are sales tax exempt, "As of 2017, 5 states (Alaska, Delaware, Montana, New Hampshire and Oregon) do not levy a statewide sales tax. California has the highest base sales tax rate, 7.25%."

Hey Google, sales tax on digital goods California, "California – Digital products are tax exempt in California. The “sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable” (though if you provide some sort of physical copy or physical storage medium then the sale is taxable.)"

Hey Google, sales tax on digital goods in Massachusetts, "Sales of digital products are exempt from the sales tax in Massachusetts."

 

So then are there any other states that we could buy mailboxes for and move to, or is it so far just MA?  And then, if it is based on County and City, are there any specific areas we need to stay away from in MA?  -Like, why doesn't Google mention MA in the first question?

And to further pinpoint less of a discrepancy, can you guys explain whether it is LL or Tilia that is going to charge me sales tax if I don't move before my Premium membership is renewed?  When I asked Tilia directly, they passed the buck back to LL.  And LL is spewing forth a bunch of blanket statements about their blog and avoiding my direct question (funny to me how they can legally implement things, but not know how to give details on backing up what it is that they're exactly doing).  Although, I did read what  Mollymews had previously said about how Tilia is basically LL.

Please and thank you

[Drake1 Nightfire]

16 minutes ago, MajikVixen Lorefield said:

Alright...

Hey Google, what states are sales tax exempt, "As of 2017, 5 states (Alaska, Delaware, Montana, New Hampshire and Oregon) do not levy a statewide sales tax. California has the highest base sales tax rate, 7.25%."

Hey Google, sales tax on digital goods California, "California – Digital products are tax exempt in California. The “sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable” (though if you provide some sort of physical copy or physical storage medium then the sale is taxable.)"

Hey Google, sales tax on digital goods in Massachusetts, "Sales of digital products are exempt from the sales tax in Massachusetts."

 

So then are there any other states that we could buy mailboxes for and move to, or is it so far just MA?  And then, if it is based on County and City, are there any specific areas we need to stay away from in MA?  -Like, why doesn't Google mention MA in the first question?

And to further pinpoint less of a discrepancy, can you guys explain whether it is LL or Tilia that is going to charge me sales tax if I don't move before my Premium membership is renewed?  When I asked Tilia directly, they passed the buck back to LL.  And LL is spewing forth a bunch of blanket statements about their blog and avoiding my direct question (funny to me how they can legally implement things, but not know how to give details on backing up what it is that they're exactly doing).  Although, I did read what  Mollymews had previously said about how Tilia is basically LL.

Please and thank you

No, Mass is exempt from digital sales tax. All of Mass. Like every single address. 

No, you probably couldn't get a PO Box and set it as your permanent address if you lived in anther state as you would then have to pay state income taxes in Mass as a resident working out of state. 

Mass didn't pop in your first question to google because we do indeed have state tax, just not on digital goods which is not what you asked. 

Why would Tilia charge you tax when they aren't the company you are paying for land tier? 

[Ayashe Ninetails]

11 minutes ago, MajikVixen Lorefield said:

So then are there any other states that we could buy mailboxes for and move to, or is it so far just MA?

You'll be hard-pressed to find the exact answer to this here. The way this type of thing is often phrased is "generally taxed/tax-exempt" as there are always exceptions. For example, my state is in the "generally exempt" from sales tax on digital goods pile, yet I still pay them on many of my digital purchases. My full tax - state & local. Perhaps due to the state where the product is being sold from. Perhaps due to the type of product. Perhaps due to the phase of the moon. Whatevs.

For a more definite and detailed answer, you'd have to find the state and local/town/city government websites for the state you're looking to move to and read the rules and guidance there. Contacting a tax professional or the state/local gov is even better.

[MajikVixen Lorefield]

I found this site: https://www.cpapracticeadvisor.com/sales-tax-compliance/article/12441611/statebystate-guide-to-the-taxability-of-digital-products, perhaps that helps makes things a bit clearer than mud for everyone else here who may still be wondering things about their situation.

 

As for me, I did call a Certified Tax Advisor, based off of what the state told me the other day (about how non-tangible electronic goods are tax exempt here).  She agreed with what the state said.  I was also surprised to learn that this even applies to crypto-currency.

Then I called my City to double check.  They said they do not handle sales taxes, they're based off of what the County does.

So then I called the County.  They also said they do no handle sales taxes, they're based off of what the State does.

I called the state again and explained how SL is run on the LL fart The Cloud, and asked if this could be a taxable electronic good (as many ppl consider it tangible).  The state clarified that they do no consider The Cloud tangible, and they agreed with what the State CTA told me the other day about Regulation 1502 and section (D) about software.

I guess I will just be waiting for further explanation from any LL Community Blog with more details (as LL keeps blanketing that they're "not tax professionals" when asked about the specifics on tax charges that they will be implementing), and I will be checking my recurring billing statement too ...Although, I would hope more information comes sooner, rather than later.  It would be nice to know WHAT exactly it is that LL thinks they should be charging sales tax on if it's otherwise thought to be exempt.

Good luck!

[Silent Mistwalker]

Try talking to a CPA, Certified Public Accountant. Not only do they know the tax laws and deal with them daily, but they also do the tax forms for those bookkeepers who are too lazy to do them, themselves. Myself not included. I was the one responsible for all the sales taxes. But I don't know what I'm talking about. 🙄

[Ayashe Ninetails]

15 minutes ago, MajikVixen Lorefield said:

Then I called my City to double check.  They said they do not handle sales taxes, they're based off of what the County does.

So then I called the County.  They also said they do no handle sales taxes, they're based off of what the State does.

Lmao, that sounds about right! 

Try Silent's suggestion and see if you get some more precise answers.

 

[Lindal Kidd]

So...let's assume that LL adds a sales tax to your purchase. You research your city, county, and state laws and they say that your purchase is exempt.

To whom do you appeal for the refund?

[Luna Bliss]

8 minutes ago, Lindal Kidd said:

So...let's assume that LL adds a sales tax to your purchase. You research your city, county, and state laws and they say that your purchase is exempt.

To whom do you appeal for the refund?

My CPA would love figuring that out!  She's always loved the virtual world dilemmas I've thrown at her.  I bet it could come via a tax refund after we do our taxes.

[Silent Mistwalker]

44 minutes ago, Lindal Kidd said:

So...let's assume that LL adds a sales tax to your purchase. You research your city, county, and state laws and they say that your purchase is exempt.

To whom do you appeal for the refund?

Linden Lab

 

https://www.taxjar.com/blog/file/sales-tax-refunds

Edited March 5, 2022 by Silent Mistwalker

[Sid Nagy]

Yes, lets start law suits over $14.79 or so.

In the end it will be take it or leave it, I guess.
If they hit me with more charges any time soon it will be leave it, as I feel it now.
Or they have to start fixing some essentials without further delay.

Edited March 5, 2022 by Sid Nagy

[Silent Mistwalker]

4 minutes ago, Sid Nagy said:

Yes, lets start law suits over $14.79 or so.

It doesn't take a lawsuit to get a refund on over paid sales tax. See the link I posted above.

[Drake1 Nightfire]

I am very surprised that LL wont be implementing sales tax on the MP... That seems like the logical place to add it to. 

[Silent Mistwalker]

13 minutes ago, Drake1 Nightfire said:

I am very surprised that LL wont be implementing sales tax on the MP... That seems like the logical place to add it to. 

MP are intangible goods. Most tax jurisdictions (in the US) do not tax intangibles, only tangibles.

Edited March 5, 2022 by Silent Mistwalker

[Coffee Pancake]

1 hour ago, Drake1 Nightfire said:

I am very surprised that LL wont be implementing sales tax on the MP... That seems like the logical place to add it to. 

and in the process define the L$ as a substitute US$ ... 

[Dragon Mommy]

Where they charge sales tax is dependent upon where the government charges them. LL can't slap a tax on the Marketplace and label it your regional sales tax without drawing the ire of the IRS. Remember they don't profit off that tax, it gets reported and paid to the state. They can slap any other fees on they want, but I don't think it's worthwhile to doom and gloom speculate about. It happens or it doesn't.

Currently the Linden Dollar isn't taxable. 

But the next ten years are gonna be real interesting in that regard with Crypto currency throwing a wrench in the works of how countries define the value and taxability of virtual currencies. Where they draw those lines will determine if $L is lumped in alongside Bitcoin or not. 

[LittleMe Jewell]

4 hours ago, Lindal Kidd said:

So...let's assume that LL adds a sales tax to your purchase. You research your city, county, and state laws and they say that your purchase is exempt.

To whom do you appeal for the refund?

You, as consumer, paid it to LL and they then paid it on to your state.  You would get your refund from LL or Tilia (just like returning a product).  They would have to file an amended return with the state to get their money back.

The PITA part for you is that you'd first have to submit a Support ticket with all sorts of documentation to prove that you did not owe the sales tax to begin with.

[Silent Mistwalker]

It's not hard to prove. All you need is your original receipt. It's not hard to do the math.

[LittleMe Jewell]

43 minutes ago, Silent Mistwalker said:

It's not hard to prove. All you need is your original receipt. It's not hard to do the math.

Yes, my invoice/receipt will show the amount of tax I paid.  However, what I meant is if LL charges me sales tax on my Premium membership fee, then it is because the 3rd party company they are using thinks it is applicable.  If my State says it is not, I'll have to send said documentation to LL showing them what my State Tax Authority said about it.  That is what I meant by 'submitting documentation to prove you did not owe the tax'.  

Edited March 5, 2022 by LittleMe Jewell

[Silent Mistwalker]

55 minutes ago, LittleMe Jewell said:

Yes, my invoice/receipt will show the amount of tax I paid.  However, what I meant is if LL charges me sales tax on my Premium membership fee, then it is because the 3rd party company they are using thinks it is applicable.  If my State says it is not, I'll have to send said documentation to LL showing them what my State Tax Authority said about it.  That is what I meant by 'submitting documentation to prove you did not owe the tax'.  

That isn't how it works. I've already linked how it does work.

[Drake1 Nightfire]

4 hours ago, Silent Mistwalker said:

MP are intangible goods. Most tax jurisdictions (in the US) do not tax intangibles, only tangibles.

And the states that do tax digital goods should have sales tax collected by LL, no?

[Silent Mistwalker]

1 minute ago, Drake1 Nightfire said:

And the states that do tax digital goods should have sales tax collected by LL, no?

I don't know of any that do. That doesn't mean there isn't any. But yes, it would be collected by LL if you live in the US. In turn, (on a quarterly basis in most cases) LL pays the sales taxes they have collected to the state or local collection agency (the government tax office). If LL makes an error of any kind, they have to a) refund the overpaid taxes to the customers and b) file an amended return in the quarter following the screw up.