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WoW, SoE, and Taxes
JulianDracos
Member UncommonPosts: 1,528
So I know there has been talk about WoW having taxes. I live in one of the states that WoW charges taxes, yet I did not recall ever paying taxes on any subscription fees for games. I checked my bank statments and they verifed that fact.
I looked into the issue a little more. Here are the places that WoW charges taxes in:
Colorado
Washington, D.C.
Illinois
New York
Texas
Utah
Washington
SoE on the other hand only charges taxes in New York and Texas. So my first question would be is WoW charging too many people taxes or is SoE not charging enough?
My second question is about other games. I checked the other likely games to see if they were charging taxes. DAOC, CoH, AC, AC2, AO - none of them charge taxes. So do you think that these companies simply are nice enough to pay the taxes for us, or are we just lucky enough that states have not forced those companies to make us pay taxes?
Can anyone think of any other games that charge taxes besides WoW and SoE games?
Comments
EVE Online does in the EU...
---sig---
PvE in general is pretty lame, if you think long and hard about it. You are spending your time beating a severely gimped AI that would lose to a well trained monkey. Best not to think too long and hard why you are wasting time playing games in general actually...
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I need more Cow Bell!
Slothman's Home Tree
What the hell.
These bastards get more greedy by the second it seems...
Of what % are the taxes?
"Fear not death; for the sooner we die, the longer shall we be immortal."
You can thank State tax regulation for that, its not the doing of the game companies. The companies are forced to pay those taxes by the state, thus the consumer is the one paying the additional tax, just like you would at any convience store.
Also there is a Tax on online Gaming in EU as well, and all games charge this tax unless I am mistaken.
Is the EU tax specific to "Online Gaming" or is it a general luxury tax that applies to all forms of entertainment (i.e. concerts, golf, etc)?
the EU has decided in its infinite wisdom (or lack thereof) that all online purchases/transactions (including MMORPG's) should be subject to value added tax. The amount charged is in theory the rate in either the EU country the game is based in...or...some other value (it seems pretty arbitary). Eve currently charges ~20% VAT, which seems to be a EU 'average'.
---sig---
PvE in general is pretty lame, if you think long and hard about it. You are spending your time beating a severely gimped AI that would lose to a well trained monkey. Best not to think too long and hard why you are wasting time playing games in general actually...
Ya. In the UK I have to pay 17.5 % VAT even if I am playing on a US server, paying in dollars, at the exchange rate at time of billing, effectively importing the content.
They decided that the country of the games player NOT game origin was what mattered. Greedy gits!!
Incidently, in 1979 when Maggie Thatcher got elected, UK VAT stood at 7%, it was 17.5% when she got booted, and no-one decided to change it back.
In my opinion Value Added Tax is the biggest ripoff in business. How does the tax add value? And what are they spending the money on?
Nahallac Silverwinds
Alter Destiny
Tunare - EQ
Oh, I do notice.
I compare the UK price to the US price.
WoW RRP
$49.99 USD, £34.99
$49.99=£26.56
Amazon UK is selling for less on special offer, but if you wanted to buy the copy (from GAME) to get into beta you had to pay full price. The 17.5% import duty is noticable here.
When SOE set up 3 EU servers, you switched from paying SOE to UBISOFT, and hence dollar to euros. But Ubi wanted the same amount of euros as dollars, despite the difference in exchange rates.
Say $14.99 right now that is £7.95. 14.99 = £10.41. Same game, more money to play. Only a couple of pounds. Sure. Try adding $2 to everything you buy, it all adds up. In Europe you might as well add 17.5% to everything.
I still think VAT sucks.
EU countries have always paid the VAT on online games so they have always been getting taxed.
The issue in the US is different. It seems only 2 (even microsoft isn't) companies are charging sales taxes. Those companies are not even agreeing on which states! So it seems some of us are getting a good deal with not paying any and others are getting the shaft
What happened with a lot of these companies is that the state tax laws in many states changed starting January 1. This means that when you stopped playing SWG in December and picked up WoW, it would appear that SOE isn't charging taxes whereas WoW is. Plus, some rulings made by state officials (particularly in Colorado's case) have made it so MMORPGs are now taxed where before they hadn't been.
A factor as to why some companies charge tax in more states than other companies is that some states require the company to have a "presence" - dev office, support office, etc. in the state before they charge sales taxes.
Basically, it's government, therefore it is as complex as can be.
This post should be on some government website because businesses do not define whether or not they charge tax nor where that tax will be charged. Were it the choice of any company there would be no tax on their product because it hurts sales (duh). That revenue goes straight the the government that is issuing the tax, if its just WoW (which I doubt) there must be some sort of extra detail that makes such taxes apply to it.
Its not only Europe that has to pay tax on online transactions. In Michigan you are supposed to pay the normal 6% tax rate if you were not charged another states tax with the transaction. So most online transactions. Of course, you don't HAVE to admit to anything, but seriously, Tax fraud, or pay $30 more dollars. I'll pay the tax.
Actually there are some internet companies that charge taxes and give the tax revenue to the government when they do not have to. There are only a few, but they do it.
If you had read the post you can see that WoW and SoE charge taxes they just disagree about the states. Maybe it is just a recent change and SoE will tax the additional states soon enough.
DAOC, COH, AC, AC2, AO - none of them charge taxes in any US state. I doubt there are any mmorpg besided WoW and SoE games at the moment that do charge them. Maybe that will change, but for the moment I hope that they leave these companies alone.
WRONG
I clearly remember reading the news announcement from SOE about this. I was playing EQ. Up to then VAT was charged only for goods bought IN Europe. I playing a game based in the US. Since I lived outside the US I paid no state tax, no VAT. The news article stated clearly that ALL EU players would now be charged VAT on online subs, EVEN if you played on a US server. Your location is what mattered, not where the game is being played.
I saw my monthly sub rise by about 2£ per month there after. There were 3 new-ish EU servers at the time, whihc cost more, due to VAT, so I had chosen to stay on the US server. But the new law changed all that.
Here is the news article;
Changes to European Union tax laws are now in effect that will add a 17.5 percent sales tax to downloadable games and online gaming services.
A news item on Sony Online's official sites for EverQuest, PlanetSide, and Star Wars Galaxies has a reminder that a value-added tax has gone into effect that will be added on top of its subscription fees ($12.95 to $14.99 per month, depending on the game) for those who live in European Union countries. Recent changes in EU tax laws require that taxes be applied for downloadable games and online services at the point of consumption, that is, in the country where subscribers reside. The 17.5 percent tax will be applied to residents of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
07/02/03 12:18 PM