Sales Tax on books? Since when?

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This post has 21 Replies | 4 Followers

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Jerry Smith | Forum Activity | Posted: Tue, Nov 12 2013 2:04 PM

Just got notice of a download (living in TN) and noticed sales tax added to the prepub order. Is this new? Mistake? Since when?

Thanks for any insight or experience . . .

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Matthew C Jones | Forum Activity | Replied: Tue, Nov 12 2013 2:48 PM

Jerry Smith:
Just got notice of a download (living in TN) and noticed sales tax added to the prepub order. Is this new? Mistake? Since when?

I am in Oklahoma and did not get charged any tax on November 8th so I doubt it is a Bellingham tax. I bet it is a new tax in Tennessee. 

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Rosie Perera | Forum Activity | Replied: Tue, Nov 12 2013 5:21 PM

Looks like a new Tennessee tax. Logos is probably required to collect it when selling to TN users, though it may be voluntary. Looks like if they don't, you would be required to file a special tax return to pay it anyway, so they're saving you the trouble. Wink

http://www.knoxnews.com/news/2013/may/19/tennessee-congressmen-struggling-with-internet/

http://tn.gov/revenue/faqs/salesandusefaq.shtml#16

http://www.nashvillescene.com/pitw/archives/2012/04/25/amazons-tennessee-customers-will-probably-get-right-on-paying-this-tax

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Doc B | Forum Activity | Replied: Tue, Nov 12 2013 5:29 PM

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

My thanks to the various MVPs. Without them Logos would have died early. They were the only real help available.

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Pam Larson | Forum Activity | Replied: Tue, Nov 12 2013 5:40 PM
From the Tennessee site noted by Rosie: "Software is currently taxed as tangible personal property (Tenn. Code Ann. Section 67-6-102(30)(B))." This is probably the basis for charging the tax, but in my opinion it's not correctly applied to Logos resources. We don't buy the software from Logos; it's free. We buy licenses to use a resource, an electronic book. I would think this would be INTANGIBLE property not tangible. At least I hope so, since California sales tax does not apply to intangible property.
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Rosie Perera | Forum Activity | Replied: Tue, Nov 12 2013 5:40 PM

Doc B:

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

You could probably apply to Texas for a refund of the tax, if you end up paying enough in any given year for it to be worth the trouble.

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Doc B | Forum Activity | Replied: Wed, Nov 13 2013 10:54 AM

Rosie Perera:
You could probably apply to Texas for a refund of the tax, if you end up paying enough in any given year for it to be worth the trouble.

Yes. When I bought Logos initially, and my first few big packages, it would have been worth the trouble. But I don't buy that much anymore, so I doubt it is.

My thanks to the various MVPs. Without them Logos would have died early. They were the only real help available.

Faithlife Corp. owes the MVPs free resources for life.

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Alan Macgregor | Forum Activity | Replied: Wed, Nov 13 2013 11:16 AM

Here in Scotland we don't have to pay tax (VAT aka Value Added Tax) at present on software/e-books that we buy from overseas websites, unless the vendor company has a physical presence in the United Kingdom of Great Britain and Northern Ireland (aka UK). Big Smile

However, that is going to change in a short time according to HMRC (Her Majesty's Revenue and Customs). As I understand it, in 2015 we shall have to pay 20% VAT on all online purchases from wherever they are purchased outside the EU (European Union). (Within the EU we shall pay as we do presently the rate of VAT charged by the country where the website is based.) Crying

It has taken governments some time to respond to the rise of online shopping, but they are finally beginning to plug the gaps in their tax-revenue streams which the internet has opened. Ah well, all good things must come to an end.Sad

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Matthew C Jones | Forum Activity | Replied: Wed, Nov 13 2013 5:11 PM

Alan Macgregor:

Here in Scotland we don't have to pay tax (VAT aka Value Added Tax) at present on software/e-books that we buy from overseas websites, unless the vendor company has a physical presence in the United Kingdom of Great Britain and Northern Ireland (aka UK). Big Smile

However, that is going to change in a short time according to HMRC (Her Majesty's Revenue and Customs). As I understand it, in 2015 we shall have to pay 20% VAT on all online purchases from wherever they are purchased outside the EU (European Union). (Within the EU we shall pay as we do presently the rate of VAT charged by the country where the website is based.) Crying

Would it help if Logos opened an office in Ireland? I volunteer to go there. Big Smile

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Jack Caviness | Forum Activity | Replied: Thu, Nov 14 2013 6:44 AM

Doc B:

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

Recently had occasion to review North Carolina sales tax law in regard to non-profit organization. Merchants are required to collect all applicable taxes on every customer. The non-profit can then apply for a refund.

Some of us fondly refer to our homeland as North Taxolina Big Smile

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Rich DeRuiter | Forum Activity | Replied: Thu, Nov 14 2013 7:33 AM

Doc B:

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

You might work for a 501(c)3, but they don't buy the resources, you do, and they stay with you. Even if they're for your ministry, they are your personal property. At least that's how I understand how this works.

 Help links: WIKI;  Logos 6 FAQ. (Phil. 2:14, NIV)

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Matthew C Jones | Forum Activity | Replied: Thu, Nov 14 2013 9:04 AM

Richard DeRuiter:

Doc B:

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

You might work for a 501(c)3, but they don't buy the resources, you do, and they stay with you. Even if they're for your ministry, they are your personal property. At least that's how I understand how this works.

That is a good point. I had not looked at it that way. Would this be the case if the resources were purchased with a book allowance? Is it because the resources are licensed to an individual?

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Rich DeRuiter | Forum Activity | Replied: Thu, Nov 14 2013 10:40 AM

Super.Tramp:

Richard DeRuiter:

Doc B:

Logos has always charged me tax in Texas, and I work for a 501(c).3, which isn't supposed to pay taxes. But Logos said it had to collect the tax anyway, so I pay it.

You might work for a 501(c)3, but they don't buy the resources, you do, and they stay with you. Even if they're for your ministry, they are your personal property. At least that's how I understand how this works.

That is a good point. I had not looked at it that way. Would this be the case if the resources were purchased with a book allowance? Is it because the resources are licensed to an individual?

I'm not a tax lawyer, and sales tax law varies by state/locality. but my understanding is that if the non-profit isn't the agent doing the purchasing, then I it's taxable. I would also expect that if the non-profit purchased it and gave it to an individual to do their work, then it would be subject to income tax, since it's a form of compensation. The pertinent question is: who retains ownership, the non-profit or the individual?

Expenses related to book allowances are not subject to income tax, or book expenses (directly related to one's work) can be deducted as professional expenses. But that's at the federal not the state or local level.

Navigating these waters for clergy in the US is quite daunting. I've been using a tax professional, who understands the special tax laws related to clergy, to help me the last few years. I recommend the same.

 Help links: WIKI;  Logos 6 FAQ. (Phil. 2:14, NIV)

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Matthew C Jones | Forum Activity | Replied: Thu, Nov 14 2013 12:53 PM

Richard DeRuiter:
Navigating these waters for clergy in the US is quite daunting. I've been using a tax professional, who understands the special tax laws related to clergy, to help me the last few years. I recommend the same.

My father and brother are pastors. They attend special tax seminars for clergy just to keep up with all the changes. Church boards should do the same to stay out of legal trouble.

Richard DeRuiter:
But that's at the federal not the state or local level.

I had not considered the difference. That makes all this twice as bad. Sad

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Mark Barnes | Forum Activity | Replied: Thu, Nov 14 2013 4:07 PM

Alan Macgregor:
As I understand it, in 2015 we shall have to pay 20% VAT on all online purchases from wherever they are purchased outside the EU (European Union).

It's true that the EU has made up that rule, but they have no authority to implement it. The EU has no jurisdiction over Logos, and because VAT is payable by the supplier, not the customer, they can't force us to pay, either.

This is my personal Faithlife account. On 1 March 2022, I started working for Faithlife, and have a new 'official' user account. Posts on this account shouldn't be taken as official Faithlife views!

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mab | Forum Activity | Replied: Thu, Nov 14 2013 4:21 PM

Considering that electricity and Internet use is taxed, Logos users have always been taxed. But don't worry.  The government is here to help find another reason to add more.Sad

The mind of man is the mill of God, not to grind chaff, but wheat. Thomas Manton | Study hard, for the well is deep, and our brains are shallow. Richard Baxter

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Mike Pettit | Forum Activity | Replied: Thu, Nov 14 2013 4:30 PM

Mark Barnes:

Alan Macgregor:
As I understand it, in 2015 we shall have to pay 20% VAT on all online purchases from wherever they are purchased outside the EU (European Union).

It's true that the EU has made up that rule, but they have no authority to implement it. The EU has no jurisdiction over Logos, and because VAT is payable by the supplier, not the customer, they can't force us to pay, either.

This is not strictly true,  you should also pay tax if you import which could cover the end user downloading electronic books. 

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David Wilson | Forum Activity | Replied: Thu, Nov 14 2013 6:21 PM

Can get worse when you are assessed $11 tax on a purchase plus a $20 flat fee to the assessor.  Becomes the type of pain with several purchases a month that can make a Book Cache subscription feel worthwhile......  provided that came with only one invoice per month to cover all the purchases....   same type of problem with overseas shipping fees on merchandise from Bellingham.... Sad

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Jan Krohn | Forum Activity | Replied: Thu, Nov 14 2013 6:22 PM
Alan Macgregor:
However, that is going to change in a short time according to HMRC (Her Majesty's Revenue and Customs). As I understand it, in 2015 we shall have to pay 20% VAT on all online purchases from wherever they are purchased outside the EU (European Union).
This law is actually in place since 2003... http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageOnlineServices_ShowContent&id=HMCE_CL_001460&propertyType=document However, there's just no way for HMRC to enforce this law on businesses that have no physical presence.

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Jack Caviness | Forum Activity | Replied: Thu, Nov 14 2013 6:42 PM

mab:

Considering that electricity and Internet use is taxed, Logos users have always been taxed. But don't worry.  The government is here to help find another reason to add more.Sad

The scariest words in the English language: "I'm from the government, and I am here to help you" (Ronald Reagan—probably a loose quote)

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