Digital Art Zone

Thanks Storypilot and Lindsey, at least I know now I’m not going crazy. For me it was only $0.08, but considering I have about $120 in wishlist and some of the environments are in the $20+ range, this could turn into a pretty hefty chunk of change.

I think I will delay buying major items until the sales tax problem is fixed by DAZ.

So downloadable items are not taxable, I think the software isn’t making allowances for variations again.  Boy you guys at DAZ are going to be in the psycho ward by the time the new site is up to snuff, and even though things ain’t exactly right you are doing a great job of correcting the problems.

Scott-Livingston - 23 May 2012 09:48 PM

I’m in NY…same thing. Never had to pay it here before.

same here…but if I understand the tax law correctly, tax cannot be applied to an intangible purchase such as downloaded digital data; however,  if this digital data is on a CD and purchased as a CD, then tax can be applied.  i do know this is the case for NY, and if Daz continues to apply tax to my pending purchases, then I simply will have to shop elsewhere.

i should also add, that if a business, e.g. Daz, does not have a brick and mortar presence in a state, then they should not be applying any tax to the purchases.  furthermore, i know in the case of New York state, it is up to the individual while submitting their state income tax to make settlement/adjustment for any appropriately applicable and outstanding sales taxes.

I was discussing this issue in a thread that completely disappeared over at Rendo while we were waiting for DAZ to become operational.

I, too, am very interested in resolution, and feedback from DAZ officials.

As I stated in the other thread, I worked in management, and dealt directly with taxation issues.

Here in California sales tax is a state mandate collection tax at point of sale.  There is no recourse of individuals for overtax claims.  It’s not like the state collecting income, or luxury tax.

The businesses are charged with collection from giant corporations down to individual self-employed, but they all must adhere to Sacramento’s tax laws.  One who collects taxes on the states behalf, but are not audited for that tax (meaning the state has no record of goods-and-services delivered) then that entity keeps it as an illegal profit.

Businesses are not charging us tax.  They only collect on the states behalf, and there are caveats in place regarding what is or is not taxable.  I believe Lindsey has presented a good case, and those attributing CA taxing of Amazon, well, the difference is two-fold in one;  Amazon products are tangible goods, and two;  A physical presence in the state of CA.

A for example of tangible goods for food markets would be as such;  Imagine, if you will, you were purchasing gasoline (taxable) at your local fill-up/quick-mart, and you decided while there you might as well pick up a twelve-pack of beer (taxable), cigarettes (taxable), and a quick bite to eat.  So, you pick out a Slim-Jim, a frozen burrito, a quick-mart hot dog, an Abba Zabba, and to top it all off, a fountain soda drink (hungry now, aren’t we?).

Upon purchase you discovered the whole of your purchases was taxed.  Well my friends, you would have been illegally taxed, because the state would not collect tax on the Slim-Jim, frozen burrito, or the Abba Zabba (non taxable food goods).  The two taxable food items are both taxed for different reasons;  The hot dog, because it is a prepared service goods, and the soda, because of the CO2 tank.

This is just a small, inconsequential example, but I think you all get the point.  If the business does not have a physical presence in the state, and is not selling tangible goods, they are not authorized to collect tax on behalf of the state.  Unless the digital tax laws presented by Lindsey are outdated, and we have no access to current legislation, I believe there is a problem here.

Now, this all could be an easy glitch with DAZ’s new system, and just needs some attention paid to it.  One way or another, I think we need some answers.

And, those of you who are saying they heard everyone was going to have to start collecting in the future (Sept., was it?).  A business is not allowed to pre-tax their customers for future taxes.  It’s a one-to-one basis.  They can only collect when they are mandated to collect, because as of the mandated time they are liable for the logged goods-and-services taxation regardless if they collect or not.  In other words, if they failed to collect the tax, but their books showed them selling a taxable product, the state would still make them pay the tax.

I believe this will be sorted.  I have faith in DAZ.  I think I’ll just hold off on purchases until there is some clarity.  And for the record, I don’t mind paying the sales tax as long as CA is actually collecting the tax.  It will be interesting to find out they will start collecting digital, non-tangible items.

Apologies for the long-winded tangent, take care all…
Ken

You might have thought it was long-winded, but I found it informative.

DaremoK3 - 25 May 2012 10:08 PM

Apologies for the long-winded tangent, take care all…

This is one of many reasons why I hate sales tax ... and why I avoid purchasing locally.  The PA sales tax is 6% with an additional 2% In Philadelphia (unless you’re paying for parking, in which case, it’s a 20% tax).  Prescriptions and some over the counter medications are supposed to be exempt from sales tax, but I have been taxed on prescriptions ... even when it was my only purchase. Food is trickier.  Supposedly, food is exempt from sales tax, except for soft drinks and powdered mixes, sports drinks, hot beverages, hot prepared foods, sandwiches, and salad bar meals.  As with your example, it’s not quite so clear cut, and non taxable food is often taxed. 

DaremoK3 - 25 May 2012 10:08 PM

Upon purchase you discovered the whole of your purchases was taxed.  Well my friends, you would have been illegally taxed, because the state would not collect tax on the Slim-Jim, frozen burrito, or the Abba Zabba (non taxable food goods).  The two taxable food items are both taxed for different reasons;  The hot dog, because it is a prepared service goods, and the soda, because of the CO2 tank.

Ultimately though, I just don’t get sales tax.  “They” tax the money I earn ... then tax it again when I purchase a product or service.  How is that not double dipping?  Though I’ve been temporarily out of state for almost 20 years, I am and always will be a native Oregonian.  Sales tax is an abomination, one that rears its ugly head from time to time in Oregon, but has always been rejected by the voters.  Shame others consider it so ... essential.

As I mentioned earlier, digital products purchased and downloaded from the internet are not subject to California sales tax.  This sales tax exemption was clarified at the (California) State Board of Equalization’s website in February 2012 shortly before the new iPad was released in March.  Digital products are intangible goods which are not subject to California sales tax.
 
See http://www.boe.ca.gov/formspubs/pub109/

I wish DAZ would address their position here so we can move on….

Digital downloads and other non-tangible product purchased on the Internet should NOT be taxed. PERIOD.

Doing so is basically taxing information (which is what DATA is).  When we “buy” a product from DAZ there is no ownership transferred.  We have no real rights to that product including transfer.  We therefore are not buying anything real but merely renting information in a very limited sense.  We acquire no physical asset in the process.  Taxing such transactions, if challenged in the courts would probably be declared unconstitutional, so why do we tolerate it?

DAZ: please check your legal positions with a lawyer and not your usual soothsayer.

RonS - 26 May 2012 11:59 AM

Digital downloads and other non-tangible product purchased on the Internet should NOT be taxed. PERIOD.

Taxing such transactions, if challenged in the courts would probably be declared unconstitutional, so why do we tolerate it?

DAZ: please check your legal positions with a lawyer and not your usual soothsayer.

Why do folks tolerate it?  Perhaps they feel one should not question the perceived authority figure? Whatever the reason, it really irks me that people have become so passive with just about everything that can adversely affect them.  This Daz tax thing and lack of general outcry is just one itsy bitsy example…

adamr001 - 24 May 2012 03:55 PM

There’s already a thread on this subject here -> http://www.daz3d.com/forums/viewthread/247/

Thanks!

Uhhh, Adam, that seems to be a link to this thread, not the one you want to redirect us too.

That’s because I merged the threads after Adam had posted - they were separate at the time.

The issue of whether or not DAZ should be collecting California Sales Tax came up in this forum over a year ago, after DAZ was told that they needed to collect it by a professional they had hired or consulted with at the time. I believe DAZ then consulted further with other professionals and authoritative sources after a similar uproar in this forum regarding the California sales tax collection rules, and then later, DAZ decided to withdraw the sales tax after they were satisfied that they did not legally have to collect it. All of this seems to have been forgotten or something in the law has changed that I’m not aware of. If something has changed I would very much like to know what it is.

DAZ… Please review the laws governing the collection of California sales tax carefully and/or consult with a professional who really, seriously knows what they are talking about in this regard. Thank you.

Well, I just called DAZ about this and they refunded me my sales tax for California. They are working on the store issue, but if you want your California Sales tax refunded, I suggest you call for the time being.

Thanks

Voodoo128 - 29 May 2012 10:42 AM

Well, I just called DAZ about this and they refunded me my sales tax for California. They are working on the store issue, but if you want your California Sales tax refunded, I suggest you call for the time being.

Thanks

Thanks for that update Voodoo128, good to know they are at least aware that it is a problem. Also, would be nice to see someone from DAZ posting here and saying whether contacting them for a refund is going to be necessary, or if they have a plan to eventually refund all the incorrectly collected tax once they work out the issue.

Storypilot - 29 May 2012 05:27 PM

Thanks for that update Voodoo128, good to know they are at least aware that it is a problem. Also, would be nice to see someone from DAZ posting here and saying whether contacting them for a refund is going to be necessary, or if they have a plan to eventually refund all the incorrectly collected tax once they work out the issue.

I agree Storypilot, it would be nice if DAZ were to tell us their plan.  I am not buying until it is fixed . . . and I am suffering withdrawl symptoms! 

If some people from CA and NY could try ordering, I believe you will no longer be charged sales tax.  I’ll see if I can find out how they’re planning to handle refunds.

I just tried placing an order and I’m still seeing the CA sales tax being added.