Sales Tax

by Gil » Wed, 25 Feb 2009 10:42:03 GMT

Sponsored Links
 Sorry if this post is a repeat of a previous post.

This is a question for US developers that are charging for their
application. Did you setup your Google Checkout merchant account to
charge sales tax for your sales? I could not find one application
which charges sales tax (maybe I missed them).


Sales Tax

by Gil » Wed, 25 Feb 2009 10:42:31 GMT


Does anyone know if developers should setup their Google Checkout
merchant account to add sales tax to transactions. I know how to set
it up I just wonder if it should be setup. I am interested in US
originating transactions (at least for now).

It looks like most applications do not charge sales tax. In fact I had
not found one that does.


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Sales Tax

by george_c » Wed, 25 Feb 2009 10:58:38 GMT

 All of you should be careful of where you have nexus, meaning where
you have some business activity (not only presence) and keep aware
that you need to charge sales tax in every state that you have nexus
and within each state you also have different sales taxes and then you
may also need to manage your B&O side of things.  Hey, the list goes

2009 is the year the IRS will be cracking down on digital sales, hope
you get some insight from your sales channel you are stocking your
apps to.

It's illegal to sell anything into the EU without charging VAT. Are
you collecting VAT?  Who is collecting it for you?

Question you should ask your CPA. Who is selling your app?  Are you
selling it as a developer or do you have a reseller lined up
somewhere?  Why are you using your own Google Checkout account to
sell?  So who is selling your app?

Good luck.


"tried to help the small developer, has anyone listened?"


Sales Tax

by Gil » Wed, 25 Feb 2009 13:15:04 GMT

 Regarding the nexus question: I thought that Google Checkout handles
it. In other words if you specify from what state your business is,
Google Checkout would calculate the tax correctly. As a developer (who
is incorporated) all you have to do is to specify the state you are
in. If you don't, no sales tax is added to purchases (it makes sense).
The question is: should you? It seems that nobody has done it (none of
the apps I seen charge sales tax).


Sales Tax

by george_c » Wed, 25 Feb 2009 21:20:37 GMT

 Google won't determine where you have nexus. You need to know this and
submit taxes collected to all the states you have nexus. You need to
charge sales tax in all the states where you have nexus. Nexus can be
created even by an agent.

Unfortunately, it has been mentioned that developers need to manage
all taxes & liabilities on their own.

There is a model that works and takes the weight away from the
developer. I can expand on it if most developers would be interested
in such a solution.

I quote:
"Nexus = connection. If you have nexus with a state, they can grab you
and tax you. If you don't, they can't. Think of it like an electric
socket. If you have no nexus it can't shock you, but stick your finger
in it and watch your hair curl."



Sales Tax

by j » Thu, 05 Mar 2009 12:22:20 GMT

 il, How do you know developers are not charging sales tax?  I am
about to publish my first app and currently setting up my merchant

George, can you elaborate on the model? I am just a programmer... I
don't know sales tax rules.

On Feb 25, 5:20am, george_c <> wrote:

Sales Tax

by george_c » Sat, 07 Mar 2009 21:58:40 GMT


Preparing a service that will help developers
align themselves legitimately how to across the globe.

Developers that wish to participate and take action, feel free to join.

For now, when selling across the world, set your sales tax rates according
to this table for EU sales (or when Market starts selling in EU)

Last one being WA, USA State tax rate at bottom would need to be changed to
your state tax rate. Change that to your state you have signed up to Google
checkout with and any other state you have signed some distribution
agreement with or created nexus. You need to confirm for now from your
accountant what the state tax rate if for digital downloads (where you are
located and what you used to sign up o Google Checkout)
I will also gather info how to depict if you have nexus in other states but
best person will be you Accountant, that knows your current activities and
where you have possibly nexus. Do hand them the link to the distribution
agreement you signed with Android Market.
as this may create nexus for you also on the state of CA also for your other
business activities. For CA state you don't need to apply a sales tax rate
as CA state is 0% for digital downloads.

Will gather info and make it available at thepoint group. Will try my best
to invite some skilled experts to express their opinions and provide some


On Thu, Mar 5, 2009 at 6:22 AM, j <> wrote:


Sales Tax

by Al Sutton » Sun, 08 Mar 2009 15:40:48 GMT


Your UK rate is wrong. It was changed to 15% last December and will stay
at 15% until Jan 2010 when it reverts to 17.5%.



george_c wrote:


Sales Tax

by Stoyan Damov » Mon, 09 Mar 2009 15:15:26 GMT

 eorge, are you sure CA's tax is 0% for digital downloads?
I'm not from (and in) US and searching for CA's tax on digital
downloads resulted in quite a few articles (from 2008) that the state
is considering to add such a tax.


On Sat, Mar 7, 2009 at 3:58 PM, george_c <> wrote:


Sales Tax

by george_c » Mon, 09 Mar 2009 21:58:54 GMT

 A state is indeed considering to follow New Yorks steps after the "Amazon
Tax" case, but at this stage no sales tax should be applied to digital
download sales in CA state. From my understanding most states will follow as
under the current economic situation, this is another way for all states to
recoup. Its expected digital download sales will be under their audit radar
too in 2009, as there is too much activity after App Store launch in mid

On Mon, Mar 9, 2009 at 2:10 AM, Stoyan Damov <> wrote:


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