Question regarding sales tax on downloaded software purchases.

[Burstbucker]

I am new to home recording. I just purchased Pro Tools 12 and am now considering buying software for drums and guitar amp sims.

I think for a guitar amp sim program I will go with the Scuffham S-Gear and for drums it will be the Steven Slate SSD4 Platinum.

These are downloads direct from their websites with no CD/DVDs....

Do you still get hit with tax when you purchase this stuff?

It might be different depending on where you live. I'm in Canada BTW. So I'm especially interested in hearing from fellow Canadians whether they got hit with tax or not.

 

[cob666]

Nova Scotia - I've only had to pay sales tax on downloadable software when the company does business IN Canada.

 

[chrisjnyc]

Not sure on the tax rules for Canada, but in the US companies that do business in your state collect sales tax at the time of purchase. If you live out of state you are "supposed" to pay the tax on your income tax returns... but its based on the honor system, so it it not enforced.

 

[PBGas]

Same. I'm in Ontario. I recently picked up a few more cabs from Two-Notes and updated one of my DAW programs. No tax.

 

[db9091]

It depends on who is selling it and whether they have a physical presence in a state, whether that state has laws on physical presence, and whether the state charges sales tax.

I assume you are in a US state that charge sales tax.

For example, Amazon has a warehouse in NC. NC made a law that if you do, you must collect it. So Amazon did finally agree to collect tax if I purchase online. If I purchase from another state and they charge me sales tax (say I travel) I can deduct this from my taxes come Income Tax time. However, I am also suppose to PAY taxes on all things I purchased but didn't pay State Tax for yet, on my Income Tax.

Often you can ask a place like Guitar Center to come in at a price which includes state tax. Or you can buy from B&H where they don't charge taxes online but again you are supposed to self report.

That will be $75 please.

 

[chrisjnyc]

It depends on who is selling it and whether they have a physical presence in a state, whether that state has laws on physical presence, and whether the state charges sales tax.

Often you can ask a place like Guitar Center to come in at a price which includes state tax. Or you can buy from B&H where they don't charge taxes online but again you are supposed to self report.

That will be $75 please.

It's not just a B&M\physical presence. Amazon collects tax in NY state because they pay associates who sell Amazon goods who reside in NY.

Are you talking about the trick where you buy the item at the store without paying tax, and they ship an empty box to an out of state address (relative or friends address)? I have not tried this at GC, but when I went to a small clothing store they offered this option to lower the price on a leather jacket.

 

[db9091]

Oh that's a new one to me!

No, I just meant if something is 475 and with tax 500 I may ask them to do 475 "out the door"

Makes me feel better. Of course the charge tax to come out to 475