I don't know if this is the right place to post this but... I was wondering if anyone else has ordered something from Gamestop and noticed that they charged sales tax on the item plus the shipping in Massachusetts. I looked it up on their website and it appears that they're not supposed to be charging tax on shipping charges in Massachusetts. Although it doesn't add up to much per item, I called to ask them to fix the website but who knows if they will...
Gamestop Charging Sales Tax on Shipping in Massachusetts
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Dead of Knight
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Hey, it saves you the trouble of putting use tax on your state tax returns. You should call them again and thank them.
[quote name='Dead of Knight']Hey, it saves you the trouble of putting use tax on your state tax returns. You should call them again and thank them.[/QUOTE]
I think what he's saying is that they're charging tax on the shipping charges when the tax should just be on the item. I could be wrong about that though...
I think what he's saying is that they're charging tax on the shipping charges when the tax should just be on the item. I could be wrong about that though...
[quote name='sabanoo']I think what he's saying is that they're charging tax on the shipping charges when the tax should just be on the item. I could be wrong about that though...[/QUOTE]
A use tax still applies to S&H charges in some (maybe most?) states and is supposed to be considered on state tax returns. It's the responsibility of the person to file all taxes not charged by the seller. Any purchase made on Amazon or any site that doesn't charge tax should still be added to a person's tax return and a taxable amount should also be accounted for on S&H charges known as "Use Tax". I'm not sure what states have a use tax but it's usually a lot less, can be as little as 1%.
A use tax still applies to S&H charges in some (maybe most?) states and is supposed to be considered on state tax returns. It's the responsibility of the person to file all taxes not charged by the seller. Any purchase made on Amazon or any site that doesn't charge tax should still be added to a person's tax return and a taxable amount should also be accounted for on S&H charges known as "Use Tax". I'm not sure what states have a use tax but it's usually a lot less, can be as little as 1%.
Survivalism
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I love how told them to fix the website because you don't like paying tax. It's not broken.
Wow, there's a lot of misinformation here.
If you read the state's website, common shipping charges like this guy is getting from GameStop aren't part of sales tax OR use tax. So the website is broken in that regard. Certain freight shipping methods are taxable, apparently. But I doubt GameStop is shipping anything via freight. So the OP was correct to report it to GameStop and ask them to change it.
And as far as Massachusetts goes, there is no separate sales/use tax on shipping like this even if you pay sales tax to the merchant or pay use tax on the item.
Now I'm sure there are physical GameStop stores in Massachusetts so what they're collecting is sales tax. If they weren't required to collect sales tax, they could still potentially collect use tax instead: "As a convenience to customers, those out-of-state retailers and mail order firms that are not required by law to register as Massachusetts vendors may register voluntarily to collect use tax." But again, a use tax isn't even involved here, and neither sales or use tax applies to common shipping.
So in short, the GameStop website is wrong to calculate the sales tax total including shipping costs.
You can read for yourself here:
http://www.mass.gov/?pageID=dorterm...erminalcontent&f=dor_publ_sales_use&csid=Ador
http://www.mass.gov/?pageID=dorterm...lcontent&f=dor_rul_reg_dir_dir_04_5&csid=Ador
If you read the state's website, common shipping charges like this guy is getting from GameStop aren't part of sales tax OR use tax. So the website is broken in that regard. Certain freight shipping methods are taxable, apparently. But I doubt GameStop is shipping anything via freight. So the OP was correct to report it to GameStop and ask them to change it.
And as far as Massachusetts goes, there is no separate sales/use tax on shipping like this even if you pay sales tax to the merchant or pay use tax on the item.
Now I'm sure there are physical GameStop stores in Massachusetts so what they're collecting is sales tax. If they weren't required to collect sales tax, they could still potentially collect use tax instead: "As a convenience to customers, those out-of-state retailers and mail order firms that are not required by law to register as Massachusetts vendors may register voluntarily to collect use tax." But again, a use tax isn't even involved here, and neither sales or use tax applies to common shipping.
So in short, the GameStop website is wrong to calculate the sales tax total including shipping costs.
You can read for yourself here:
http://www.mass.gov/?pageID=dorterm...erminalcontent&f=dor_publ_sales_use&csid=Ador
http://www.mass.gov/?pageID=dorterm...lcontent&f=dor_rul_reg_dir_dir_04_5&csid=Ador
Thanks Kodave for clearing up my post. The mass.gov posting was really helpful for my point...
By Gamestop.com's own admission, they shouldn't be charging tax on shipping in Massachusetts and a couple of other states. http://www.gamestop.com/gs/help/Payment_Options.aspx
I merely posted my original message to the forum because I wanted more people to be aware of what they're paying in sales tax and maybe lobby for a correction on Gamestop's website if it's applicable. Ultimately, it's not a lot of money per order... The differential in my order amounted to only around 20 cents, however, that differential could amount to a lot of money from a lot of people in the long run. Like most people, I don't like being overcharged, but I'd be okay with the extra tax if I could be sure it was being paid back to the state of Massachusetts and that's something that can't be guaranteed.
By Gamestop.com's own admission, they shouldn't be charging tax on shipping in Massachusetts and a couple of other states. http://www.gamestop.com/gs/help/Payment_Options.aspx
I merely posted my original message to the forum because I wanted more people to be aware of what they're paying in sales tax and maybe lobby for a correction on Gamestop's website if it's applicable. Ultimately, it's not a lot of money per order... The differential in my order amounted to only around 20 cents, however, that differential could amount to a lot of money from a lot of people in the long run. Like most people, I don't like being overcharged, but I'd be okay with the extra tax if I could be sure it was being paid back to the state of Massachusetts and that's something that can't be guaranteed.
cynicalaa22
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I love not having state taxes in Florida.
donkeydrop
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It's not as straightforward as it seems. If they are charging you just for the shipping (i.e. what they pay UPS) they that would not be taxable. However they most likely are charging you more than that, so it can still be considered taxable.
For example suppose company A sold you a game for $60 + $1 shipping, and company B sold you the same game for $1 + $60 shipping. If shipping was always excluded then company B would avoid most of the sales tax. So, even states that exempt shipping from their sales tax have more detailed rules to make sure they don't get cheated.
For example suppose company A sold you a game for $60 + $1 shipping, and company B sold you the same game for $1 + $60 shipping. If shipping was always excluded then company B would avoid most of the sales tax. So, even states that exempt shipping from their sales tax have more detailed rules to make sure they don't get cheated.
Dead of Knight
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[quote name='sabanoo']I think what he's saying is that they're charging tax on the shipping charges when the tax should just be on the item. I could be wrong about that though...[/QUOTE]
That's what I get for reading this thread after a long day of work.... My joke wasn't even applicable.
That's what I get for reading this thread after a long day of work.... My joke wasn't even applicable.
[quote name='donkeydrop']It's not as straightforward as it seems. If they are charging you just for the shipping (i.e. what they pay UPS) they that would not be taxable. However they most likely are charging you more than that, so it can still be considered taxable.[/QUOTE]
That's not correct, especially in this situation. Mass. only collects tax on certain types of freight shipping. Its right there on their website if you care to read it. Plus shipping and handling includes more than what they might pay USPS/UPS/FedEx/etc. or have in their contract with a delivery service. Preparation, boxes, tape, etc. are all part of the shipping and handling. Overhead costs like that aren't going to be taxable against the consumer or be collected by the vendor. Again, read their website explaining how sales/use taxes are collected and applied against shipping charges.
From the freakin' state website:
The Commissioner will treat a transportation charge, as defined in this Directive, as nontaxable provided that the following requirements are met: the charge (1) reflects a cost of preparing and moving the goods to a location designated by a retail customer; (2) is separately stated on the invoice to the customer (not merely on the internal books and records of the vendor) and (3) is set in good faith and reasonably reflects the actual costs incurred by the vendor. The time or place of the sale, or the manner of delivery of the property, whether by common carrier or in the vendor’s own truck, and passage of title will no longer be considered determinative of whether the transportation charges are subject to sales tax.
Its straight forward that GameStop can't charge consumers like the OP for the shipping charges under Mass. law. Again, just read the government's own explanation of it.
OP might want to consider contacting a site like the Consumerist about this if GameStop is going to drag their feet about correcting something that doesn't benefit them and isn't mandated by law. All they're doing by overcharging consumers for tax is lining the pockets of the Mass. government when the Mass. government doesn't deserve that much money by law. And there is likely no recourse for consumers to get any of that money back.
That's not correct, especially in this situation. Mass. only collects tax on certain types of freight shipping. Its right there on their website if you care to read it. Plus shipping and handling includes more than what they might pay USPS/UPS/FedEx/etc. or have in their contract with a delivery service. Preparation, boxes, tape, etc. are all part of the shipping and handling. Overhead costs like that aren't going to be taxable against the consumer or be collected by the vendor. Again, read their website explaining how sales/use taxes are collected and applied against shipping charges.
From the freakin' state website:
The Commissioner will treat a transportation charge, as defined in this Directive, as nontaxable provided that the following requirements are met: the charge (1) reflects a cost of preparing and moving the goods to a location designated by a retail customer; (2) is separately stated on the invoice to the customer (not merely on the internal books and records of the vendor) and (3) is set in good faith and reasonably reflects the actual costs incurred by the vendor. The time or place of the sale, or the manner of delivery of the property, whether by common carrier or in the vendor’s own truck, and passage of title will no longer be considered determinative of whether the transportation charges are subject to sales tax.
That's obviously not whats going on here and even then its not that straight forward. Its likely a lot of companies can't even do that because its dishonest to the consumer. It seems like Mass. wants the reasonable and actual shipping costs stated separately and not taxed - you can't pull a quick one like that. If you do, its likely some form of tax evasion between the business and the state, and violating the consumer's rights by trying to tax them on shipping.
Its straight forward that GameStop can't charge consumers like the OP for the shipping charges under Mass. law. Again, just read the government's own explanation of it.
OP might want to consider contacting a site like the Consumerist about this if GameStop is going to drag their feet about correcting something that doesn't benefit them and isn't mandated by law. All they're doing by overcharging consumers for tax is lining the pockets of the Mass. government when the Mass. government doesn't deserve that much money by law. And there is likely no recourse for consumers to get any of that money back.
donkeydrop
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[quote name='kodave']T
Its straight forward that GameStop can't charge consumers like the OP for the shipping charges under Mass. law. Again, just read the government's own explanation of it.
[/QUOTE]
Sorry, but you don't understand what you're quoting. As I said there are rules that have to be met, and if Gamestop doesn't want to bother with those rules then they are free to charge the tax. As long as they turn the tax over to the state then they have done nothing wrong.
Its straight forward that GameStop can't charge consumers like the OP for the shipping charges under Mass. law. Again, just read the government's own explanation of it.
[/QUOTE]
Sorry, but you don't understand what you're quoting. As I said there are rules that have to be met, and if Gamestop doesn't want to bother with those rules then they are free to charge the tax. As long as they turn the tax over to the state then they have done nothing wrong.
[quote name='donkeydrop']Sorry, but you don't understand what you're quoting. As I said there are rules that have to be met, and if Gamestop doesn't want to bother with those rules then they are free to charge the tax. As long as they turn the tax over to the state then they have done nothing wrong.[/QUOTE]
lulz. Perhaps "can't" was too strong and "shouldn't" should be used, but the general point remains the same. Also you said nothing of the sort. You were trying to argue they can tax your S&H if the S&H exceeds the actual or reasonable costs of S&H. Under Massachusetts state law that does not appear to be true unless S&H is built into the price of the item from the outset. It seems more like the retailer is supposed to be on the hook for pulling something like that.
GameStop itemizes shipping and handling separately online. I know this because I've ordered from them online before. The amount they charge for S&H on its face is what would classify under "reasonable" under state law. If you're ordering online in Massachusetts, under Massachusetts law, they should not include that S&H dollar amount as part of the total to determine how much sales tax to collect. That's a failure to follow the letter of the law on their part (but its not practically actionable by consumers).
Its as plain and simple as that as far as OP's concerns go.
Now, if GameStop collects too much tax, like they are doing now at least in the form of online purchases made in Massachusetts, they can either reimburse the customer or pay the tax to the state (and the state isn't going to waste time tracking you down to dole out refunds). Some states allow you to submit a form for a refund if you were charged too much sales tax. Massachusetts appears to use an Appellate Tax Board (http://www.mass.gov/?pageID=a$$$encylanding&L=4&L0=Home&L1=Hearings+%26+Appeals&L2=Oversight+Agencies&L3=Appellate+Tax+Board&sid=Eoaf) to hear appeals about all taxes, including sales and use tax. Its probably more expensive to file an appeal with them than it is to just over-pay on the tax.
But that doesn't change the fact that under state law, GameStop shouldn't be collecting the tax including the separately itemized S&H value in the first place.
But incorrect sales tax calculations are common through just about every state and there is little that can be done about it other than tell the store they are not charging the proper tax. Many major publications have done stories about stores in states charging sales tax on non-taxable items (like certain foods, water, toiletries, medicine, etc.). The states usually don't give a shit even though they know stores shouldn't be taxing those items. Usually there are no penalties for collecting too much sales tax - just penalties if you're not giving the state the sales tax you collect.
So GameStop is doing something "wrong" by collecting too much sales tax, but its nothing they will be punished for. But since collecting too much sales tax doesn't benefit them and hurts their customers, they should probably just fix their online system.
EDIT:
Interestingly enough donkeydrop, your discussion points are more apt for California law. In CA only actual shipping costs are tax exempt and handling costs are not tax exempt. Additionally, any excessive S&H charges are specifically taxable (i.e. charging $1 for the item and $60 for shipping).
And it gets weirder with GameStop because they itemize S&H merely as "Handling", even though the shipping method page refers to it as "handling" but the "handling" options include shipping methods and processing methods. Its really an odd duck.
So really, whatever portion of the S&H fee is shipping is supposed to be tax exempt in CA while the handling portion of the fee isn't tax exempt. But since they call S&H "Handling" on the itemization, everything for S&H might be taxable even though it probably shouldn't be entirely taxable since part of that is obviously going to actual shipping costs.
Furthermore it seems like GameStop.Com includes S&H costs into the total used to determine how much sales tax to collect across the board, when I'd imagine many states exempt S&H from sales tax. So OP is actually onto something here.
But as donkeydrop said and as I re-iterated above, while GameStop probably shouldn't be doing this, as long as they're turning all the collected sales tax money to the state, there isn't much that can be done other than bring it to their attention and hope they change it.
Edit 2:
For another comparison, Kentucky says shipping is tax exempt, handling is not tax exempt, but if you itemize it as "shipping and handling" the whole amount is taxable. In North Dakota, all S&H is taxable unless the item itself is tax exempt. In Florida, S&H is tax exempt if itemized separately and the consumer has the option to pick up the item from the retailer. If the consumer doesn't have the option to pick it up in store and must pay some kind of S&H, its taxable even if itemized separately.
I can only imagine how many online sites aren't collecting enough sales tax or are collecting too little seeing how wildly S&H tax exemptions vary.
But AGAIN, as far as OP is concerned, GameStop.Com shouldn't be using the "Handling" itemization amount with the purchase total for calculating sales tax in Massachusetts.
lulz. Perhaps "can't" was too strong and "shouldn't" should be used, but the general point remains the same. Also you said nothing of the sort. You were trying to argue they can tax your S&H if the S&H exceeds the actual or reasonable costs of S&H. Under Massachusetts state law that does not appear to be true unless S&H is built into the price of the item from the outset. It seems more like the retailer is supposed to be on the hook for pulling something like that.
GameStop itemizes shipping and handling separately online. I know this because I've ordered from them online before. The amount they charge for S&H on its face is what would classify under "reasonable" under state law. If you're ordering online in Massachusetts, under Massachusetts law, they should not include that S&H dollar amount as part of the total to determine how much sales tax to collect. That's a failure to follow the letter of the law on their part (but its not practically actionable by consumers).
Its as plain and simple as that as far as OP's concerns go.
Now, if GameStop collects too much tax, like they are doing now at least in the form of online purchases made in Massachusetts, they can either reimburse the customer or pay the tax to the state (and the state isn't going to waste time tracking you down to dole out refunds). Some states allow you to submit a form for a refund if you were charged too much sales tax. Massachusetts appears to use an Appellate Tax Board (http://www.mass.gov/?pageID=a$$$encylanding&L=4&L0=Home&L1=Hearings+%26+Appeals&L2=Oversight+Agencies&L3=Appellate+Tax+Board&sid=Eoaf) to hear appeals about all taxes, including sales and use tax. Its probably more expensive to file an appeal with them than it is to just over-pay on the tax.
But that doesn't change the fact that under state law, GameStop shouldn't be collecting the tax including the separately itemized S&H value in the first place.
But incorrect sales tax calculations are common through just about every state and there is little that can be done about it other than tell the store they are not charging the proper tax. Many major publications have done stories about stores in states charging sales tax on non-taxable items (like certain foods, water, toiletries, medicine, etc.). The states usually don't give a shit even though they know stores shouldn't be taxing those items. Usually there are no penalties for collecting too much sales tax - just penalties if you're not giving the state the sales tax you collect.
So GameStop is doing something "wrong" by collecting too much sales tax, but its nothing they will be punished for. But since collecting too much sales tax doesn't benefit them and hurts their customers, they should probably just fix their online system.
EDIT:
Interestingly enough donkeydrop, your discussion points are more apt for California law. In CA only actual shipping costs are tax exempt and handling costs are not tax exempt. Additionally, any excessive S&H charges are specifically taxable (i.e. charging $1 for the item and $60 for shipping).
And it gets weirder with GameStop because they itemize S&H merely as "Handling", even though the shipping method page refers to it as "handling" but the "handling" options include shipping methods and processing methods. Its really an odd duck.
So really, whatever portion of the S&H fee is shipping is supposed to be tax exempt in CA while the handling portion of the fee isn't tax exempt. But since they call S&H "Handling" on the itemization, everything for S&H might be taxable even though it probably shouldn't be entirely taxable since part of that is obviously going to actual shipping costs.
Furthermore it seems like GameStop.Com includes S&H costs into the total used to determine how much sales tax to collect across the board, when I'd imagine many states exempt S&H from sales tax. So OP is actually onto something here.
But as donkeydrop said and as I re-iterated above, while GameStop probably shouldn't be doing this, as long as they're turning all the collected sales tax money to the state, there isn't much that can be done other than bring it to their attention and hope they change it.
Edit 2:
For another comparison, Kentucky says shipping is tax exempt, handling is not tax exempt, but if you itemize it as "shipping and handling" the whole amount is taxable. In North Dakota, all S&H is taxable unless the item itself is tax exempt. In Florida, S&H is tax exempt if itemized separately and the consumer has the option to pick up the item from the retailer. If the consumer doesn't have the option to pick it up in store and must pay some kind of S&H, its taxable even if itemized separately.
I can only imagine how many online sites aren't collecting enough sales tax or are collecting too little seeing how wildly S&H tax exemptions vary.
But AGAIN, as far as OP is concerned, GameStop.Com shouldn't be using the "Handling" itemization amount with the purchase total for calculating sales tax in Massachusetts.
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