#8737487, By Kain201 Steam and direct download sales

  • Kain201 29 May 2012 17:26:40 1,620 posts
    Seen 3 days ago
    Registered 11 years ago

    This is from DFNathan, who works for Double Fine:

    The US equivalent of VAT is what we call sales tax. It's a bit different in that it's usually added on to the base price rather than included in it. For internet purchases, the law in the US is wierd. Basically, states collect sales tax but can only compell online retailers to collect it when the retailer has a physical presence in that state. For any internet purchases made from a company in a different state (or country!), which pretty much 99% of internet purchases are, individuals are supposed to keep a personal record of all purchases and then send the state a check. It's an honors system with no enforcement or penalty, so of course no one does it.

    So, yes, in effect gamers in the US pay no sales tax when they purchase games over the internet, and even if they did, since tax is added on after the fact for us in the US, it would not come out of the base price in the same way a VAT does in the EU.

    PS - since I suspect you'll ask, purchasing Microsoft Points on the 360 may be subject to different tax treatment than purchasing actual games through Steam. I really have no idea about the specifics of that, just that we do have to account for VAT in all of our EU and UK sales.
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