The San Francisco Chronicle is reporting (http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/02/08/MN185385.DTL) on plans to require online retailers to charge sales tax at a national level. This would make it very difficult for businesses to deal with taxes, as the article points out: "The industry insists that the myriad state and local tax codes, even in a simplified form being proposed, are too complicated for any company to navigate." Small companies would suffer the most.

I believe the current system of only taxing sales to states where companies have a physical presence is better than requiring companies to follow the tax codes of each of the states they sell to. Forcing companies to obey the tax codes of each state regardless of their having no presence in that state seems like a very lousy deal for small companies who cannot handle such a complicated system.

Such legislation would be a boon for order taking companies like ShareIt and RegNow since for many shareware authors it would be better to use their service than navigate the tax laws themself.

Or if like 90% of the world's population you don't live (or run your business) in the United States, you simply feel sorry for your American competitors. (Or friends ;) )

I don't know America's tax laws, but if you were selling through a company like Regsoft - not located in America though, maybe you could avoid these "state to state" tax laws?

Maybe shareware/indie developers would have to take the approach of on-line gambling sites: incorporate outside the US. Otherwise, non-US developers will have a significant advantage over domestic US developers. I'm amazed that the US government continues to try to regulate something that is practically impossible to regulate.

Originally posted by kerchen
Maybe shareware/indie developers would have to take the approach of on-line gambling sites: incorporate outside the US. Otherwise, non-US developers will have a significant advantage over domestic US developers. I'm amazed that the US government continues to try to regulate something that is practically impossible to regulate.

Incidentally this tax dodge is done by many many major US corporations that I'm sure you've heard of. So don't think of it as a fringe thing. I'm told the IRS is making up the money by auditing more families though :-)

The way to compensate is to do what the Canadian government does, which is charge tax on the delivery side. It keeps shareware and digital-delivery content out of the taxation loop but that's not their primary target anyways. I'm pretty sure they want a piece of the Amazon.com-type action.

If I have anything sent by mail to me (books, software, cds) I have to go to a postal outlet to pick them up. There I'm charged a Goods and Services Tax (7%) as well as the Provincial Sales Tax(8%) on the value of my item. Yes, I pay PST on items even if they were purchased outside the province!

That's Canada for you, though - taxed and taxed again!

Yeah, I wonder why the United States is constantly trying to control the Internet! Guess they also want to make a buck out of it :)

for those who use regnow or a similar service to sell/distribute they're games, are you required to pay taxes on the income that regnow credits you with, or does regnow take the taxes out before hand? and if you have a business, do you count this as business income? thanks