Sales tax on the ATX product - robbing you with a pen?

[STYLJ248]

I live in Florida and I admit I am not an expert in Sales tax.... it is just too confusing, convoluted and dependent on each state. When clients have questions about sales tax, I usually advise them to call the DOR and ask directly since they know their circumstances best. I have seen too many businesses struggle or close due to unpaid sales tax because they did not understand the specific rules for all the nuances of their business product and/or sales. The DOR will ask questions about their business that they did not even know would be affected or applicable to sales tax.

So when I realized that when I order my (downloadable) program for Quickbooks and Creative Solutions, they do not charge me sales tax, I wondered why I do have to pay sales tax for my Wolters Kluwer/ATX tax software and called the FL DOR just to double check on the rules.

According to a representative from FL DOR, sales tax is only charged on "canned software delivered on Tangible Personal Property (CD, etc.)".

So then I called my sales representative at WK/ATX. She told me they charge sales tax to everyone, regardless of the state. So I asked to speak to Accounts Receivable.

The AR rep said it does not matter what FL DOR says, they charge sales tax regardless of your state or the type of product you receive.

The FL DOR offered to talk to WK/ATX rep and the WK/ATX rep agreed that they would talk to the DOR, but no matter what the FL DOR had to say, WK/ATX would not change their policy because they always send a CD. I told them I don't want the CD, and they said .... (wait for it) ...... "We have to send you a CD, so we can charge the sales tax".

Oh yeah... Also according to the FL DOR (and they offered this, I did not even ask), they (FL DOR) probably does not receive the FL sales tax from WK/ATX that we pay on these products, because it is not required.

Site showing map with legends showing taxability of software transactions:
http://taxfoundation.org/blog/states-sales-taxes-software

[Jack from Ohio]

I see no reason to be complaining here.  ATX does not pocket the sales tax, your STATE does.

Same rule applies to everyone everywhere. 

If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management.  .

Edited October 23, 2015 by Jack from Ohio
.

[ILLMAS]

You can always request a refund of the sales tax from FL.

[jklcpa]

From the map in your link, the State of FL does require sales tax be collected on tangible goods including that software on CD. Depending on the package that you purchase, some of the larger packages that ATX offers also includes research materials in print (Max, TTO, Advantage, etc), so purchasers of those products are receiving tangible goods from ATX.

[Gail in Virginia]

If you read what the OP said, the same rule DOES NOT apply to everyone, everywhere.  That is his point.  And as far as requesting a refund from FL, if what the person from the FL DOR said is correct, the sales tax is not being remitted to FL.  So no refund. 

[GeneInAlabama]

 

>>If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management.  .<<

I paid $43.08 to Drake for sales tax.  It did not make it unaffordabel, but I do not like to pay tax that I do not owe.  According to the reference, in Alabama it is taxable if it is canned but not taxable if it is custom software.  What determines if it is canned or custom?  This just shows the complexity of collecting sales tax on items sold on the internet.  

 

[jklcpa]

Gene, I think you would owe that sales tax because Drake sends out the first release of the software on CD in December, so that would be canned software on tangible, and you would be taxed regardless because AL also taxes the canned software received via download also.

[jklcpa]

I'm surprised that no one here has spotted or commented on the irony of the source of the map contained in the OP's link?

"Source: Commerce Clearing House"  aka known as CCH. 

[STYLJ248]

 The ATX product is a canned product (not customizable for individual customers) and if I do not WANT a CD (or any other tangible property since it is pretty much all online), I should not be paying sales tax since only 'canned software delivered on tangible personal property is taxable'.
 

>>(John from Ohio): "I see no reason to be complaining here.  ATX does not pocket the sales tax, your STATE does.

Same rule applies to everyone everywhere. 

If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management. "<<

SERIOUSLY? First of all, I just wanted to pass this information along, I wasn't really looking for a debate. But since YOU brought it up.....It has nothing to do with whether I can afford it or not. I  do not like to pay ANY tax I am not required to. Plus, I constantly fight to keep my clients from paying tax they do not have to. Do you  just let yours pay taxes that are unnecessary because they can afford it?? I feel bad for them, they deserve better.
My main point for bringing this up and thinking others may be interested is that all the other software I purchase, allows me to receive products via the internet and then correctly, does not charge sales tax. Whereas CCH's response, 'we don't care if you don't want the CD or other tangible products, we are sending them, otherwise we cannot charge you the sales tax'.
Good job at paperwork reduction and saving trees/the environment CCH.

The other thing is the FL DOR said they have dealt with other companies like this. You request download only, but they still charge you sales tax because they offer the CD, then they do NOT send in the sales tax on downloadable only sales because they don't have to. They could not say whether ATX does that but that IS why you would not be able to get refund from the state.

For the last couple of weeks we have been trying to decide whether to stick with ATX or switch to UltraTax, which I have used before and loved, especially when combined  with their accounting software I already use. Now I am also considering, would I rather pay extra for a superior product, or more tax than I should to the alternative because the company just cannot be bothered changing their policy to save their customers some money....  it may not be a lot to any one of us, but it adds up over the years and if you add up all the avoidable sales tax that is being collected from all applicable customers, it is probably quite considerable.

[STYLJ248]

I'm surprised that no one here has spotted or commented on the irony of the source of the map contained in the OP's link?

"Source: Commerce Clearing House"  aka known as CCH. 

I did not even notice that! Perfect!

[Jack from Ohio]

 The ATX product is a canned product (not customizable for individual customers) and if I do not WANT a CD (or any other tangible property since it is pretty much all online), I should not be paying sales tax since only 'canned software delivered on tangible personal property is taxable'.
 

>>(John from Ohio): "I see no reason to be complaining here.  ATX does not pocket the sales tax, your STATE does.

Same rule applies to everyone everywhere. 

If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management. "<<

SERIOUSLY? First of all, I just wanted to pass this information along, I wasn't really looking for a debate. But since YOU brought it up.....It has nothing to do with whether I can afford it or not. I  do not like to pay ANY tax I am not required to. Plus, I constantly fight to keep my clients from paying tax they do not have to. Do you  just let yours pay taxes that are unnecessary because they can afford it?? I feel bad for them, they deserve better.
My main point for bringing this up and thinking others may be interested is that all the other software I purchase, allows me to receive products via the internet and then correctly, does not charge sales tax. Whereas CCH's response, 'we don't care if you don't want the CD or other tangible products, we are sending them, otherwise we cannot charge you the sales tax'.
Good job at paperwork reduction and saving trees/the environment CCH.

The other thing is the FL DOR said they have dealt with other companies like this. You request download only, but they still charge you sales tax because they offer the CD, then they do NOT send in the sales tax on downloadable only sales because they don't have to. They could not say whether ATX does that but that IS why you would not be able to get refund from the state.

For the last couple of weeks we have been trying to decide whether to stick with ATX or switch to UltraTax, which I have used before and loved, especially when combined  with their accounting software I already use. Now I am also considering, would I rather pay extra for a superior product, or more tax than I should to the alternative because the company just cannot be bothered changing their policy to save their customers some money....  it may not be a lot to any one of us, but it adds up over the years and if you add up all the avoidable sales tax that is being collected from all applicable customers, it is probably quite considerable.

The value of the time I would waste chasing this small amount far exceeds the small amount.  It is a cost of business.  There are two dozen far more important details about tax software than the $80-$90 (or less) sales tax on the price.  Minutia

Will you chase this for all states?  Or is this just you and your state. 

[STYLJ248]

>>"If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management. "<<

>>"Will you chase this for all states?  Or is this just you and your state."<<

Again, I did not really want to argue about the amount nor do I plan on 'chasing' anything.  You seem to have a strong, almost protective attachment towards the company and I am not sure why your tone is so pugnacious towards me because of my opinion, so I sort of doubt it, but maybe if you could have heard the attitude behind the words.  It was borderline sarcastic and conveyed the attitude "it's not that we do not know how it should be done, we just do not plan on doing anything different".

I guess maybe I was overly sensitive because of all the money I dished out this week for software, but today this rubbed me the wrong way and spoke of the attitude of a company towards it's customers. I feel it speaks to overall mindset. Other software companies bothered to take the time to do it correctly why doesn't CCH feel the same? Especially after taking the time to publish an article meant to educate people on the subject.

Over the last few years, I think there has been plenty to ACTUALLY complain about with this software (and still is) and there have been things that they should be applauded for, but I know from personal experience the programmers DO care and  work very hard to get the program right for all of us. This, I'm afraid, is NOT the main focus or purpose of the powers that set policy and prices. I am not so naïve to think that it always would be, but sometimes it feels good to just get it off your chest and let it out there, no matter how minor to others.So maybe you could stop minimizing my thoughts or posts and move on to something else that actually warrants debate.

 

[Jack from Ohio]

There are multiple other software vendors at your fingertips.  Problem solved.

[jklcpa]

Jack, enough with the snarks and little quips. Your remarks in your first post suggesting that this new member cannot afford the software or needs a course in budgeting were out of line.

This person posted a concern regarding the company's handling of sales tax compared with that of other software vendors and provided a link to a useful map of sales tax rules by state, and has now voiced concerns over the company's overall treatment of its customers, its policies and pricing. There's no reason anyone here should not be able to discuss these issues as they do pertain to the ATX software and CCHSFS.

[Jack from Ohio]

Just let me know when CCH/ATX changes their sales tax policy.

[JohnH]

Jack, enough with the snarks and little quips. Your remarks in your first post suggesting that this new member cannot afford the software or needs a course in budgeting were out of line.

This person posted a concern regarding the company's handling of sales tax compared with that of other software vendors and provided a link to a useful map of sales tax rules by state, and has now voiced concerns over the company's overall treatment of its customers, its policies and pricing. There's no reason anyone here should not be able to discuss these issues as they do pertain to the ATX software and CCHSFS.

I agree.  I think is important to allow new posters a little more leeway and consideration.  After all, we need to encourage them to return and be a part of this community.  The ability to make distinctions is a mark of a good business mind. 

[Catherine]

Jack tends to be aggressive and snarky; we all know that.  

However, the original poster makes an excellent point.  By charging sales tax that they are NOT passing on to the state, they are effectively stealing from both the state (in whose name they are taking additional funds that are not required to be collected) and from the person who is paying the higher-than-required price.

My question is rather, do you really want to do business with a company that has NO qualms about such unethical acts?

 

[kcjenkins]

I see no reason to be complaining here.  ATX does not pocket the sales tax, your STATE does.

Same rule applies to everyone everywhere. 

If the cost of the sales tax makes the software unaffordable, you are shopping in the wrong department, or need a class in business budget management..

Jack, dear friend, this time you are 100% wrong.  They collect it from ALL, but only because that's the easy way FOR THEM..  They are benefiting because shipping the CD  costs a lot less than the sales tax on the whole package, but saves them a very small amount of 'bookkeeping' to track which packages to charge it on.  Plus, when they know that they don't have to charge it on downloadable product, the right thing to do, both legally and morally, is to not charge it when it is not required.  It adds up.  A few years back, my son's IT firm had a CA sales tax audit.  At the time, the bookkeeper did not realize that the tax was not required on downloadable product, but when I came out for the audit, I brought the issue up, the auditor agreed with me, we went through the invoices, and we ended up getting back several THOUSAND in overpaid sales tax, which we refunded to the customers.  Reprogramming the invoicing system to reflect the correct taxablity took me about 20 minutes.  Problem eliminated.  CCH certainly has the same ability.

And the snarky last paragraph is beneath you.   I hope you will reconsider that this is hardly a way to make a newbie feel welcome.  Or even an old-timer like me.  His message made it clear that it was not so much about the money as it was about the rip-off.  And it is a rip-off when they charge you for something you don't need, just so they can charge you sales tax on the whole package.

[jklcpa]

Jack tends to be aggressive and snarky; we all know that. 

 

New members do not know that though, so I have to agree with JohnH and KC about being more welcoming of new members, not subjecting them to undeserved personal attacks.

 

[Jack from Ohio]

I am waiting for more than just a brand new 1 post member's word that CCH is practicing things that are illegal in regards to sales tax.

For the record, I heard that Drake does not submit all sales tax collected. (sarcasm alert)

It is a very serious charge to levy in an open forum that everyone here is instantly believing. 

A person logs on as a new member, starts throwing serious allegations about a company with nothing more than "...said..."  and "...he told me that...." with no facts to substantiate it.

Call me skeptical.  Call me not willing to fall gullible to another troll with a grievance against CCH.  Seems I am in the minority.

[easytax]

From one question so many off-shoots happen //// shows a decent response and respect for discussion!

As an aside: cpaacadamey.org has a number of free "webinars" on sales tax that are good learning experiences (yes, they try to sell you on the presenting companies services but you do NOT Have To buy). One such is here: http://www.cpaacademy.org/webinars/a0DC000000nevV7MAI .

Given that sales tax can be levied even down to the city, county, ANY municipal section -- it is no wonder that many companies take the "easy way" out --- and even then can be incorrect (ie. example PA has a 6% and 7% sales tax depending on where you buy things -- so which one do you collect??? even the government has argued on place of sale, address of buyer, address of seller, etc.)

 The ATX product is a canned product (not customizable for individual customers) and if I do not WANT a CD (or any other tangible property since it is pretty much all online), I should not be paying sales tax since only 'canned software delivered on tangible personal property is taxable'.

Agreed --- HOWEVER -- the bottom line here is --- they do not offer anyway other than receiving the CD to buy the program ---- HENCE -- your choice buy what is offered - or do not. Therefore the sales tax is part f the equation and REQUIRED from this type of sale. The fact that it would be nicer for us (INCLUDE Me) to not get the CD and do all by download is not revalent as it is not one of CCH's offerings. 

I agree.  I think is important to allow new posters a little more leeway and consideration.  After all, we need to encourage them to return and be a part of this community.  The ability to make distinctions is a mark of a good business mind. 

THANKFULLY :  As my mind at times is DEAD (not even a good business mind) and if this forum has helped "get-er-rite"; so asking what may seem like a "dumb" question is appreciated -- so ALL new ones (us semi-old ones too) are given leeway and consideration...   from all during most times and when not, we even grow knowledge then --- as to who to listen to and NOT listen too --- follow and think on the ones helping /// let the others to dust ...

 

New members do not know that though, so I have to agree with JohnH and KC about being more welcoming of new members, not subjecting them to undeserved personal attacks.

 

Agreed, if new, you do not know who to listen too or "worry about" --- so they have to learn from and about us.       With that said --- MY BELIEF here /// a thicker skin can be developed and becoming a "duck" that sheds the excess water is a good trait to learn; even here.    BESIDES: like the medical beliefs -- try this for a decade and then we will tell you we are wrong and go back to the original --- dirt is good but because many keep their kids safe (and clean) they do not build up any immune system whereas if they played in dirt and were exposed --- they  build that immunity --- the same can be said to exposure to what might be construed as "snarky" and short, mean answers where it may simply be the way that person comes across --- we can all still learn from that person --- even if it is NOT to be bothered in the future and take it with a LARGE grain of salt.

As another aside ---- if everything were straight forward; we would all be out of business --- where as the government makes money in confusion, so do we --- if people could follow the tax laws because they were straight forward --- then we would NOT be needed.. ----- thread off to another "off shoot".   Have a GREAT Halloween.

 

[mcb39]

IMO, State Sales Tax is one of the most confusing and complex issues that we deal with; at least in WI.  I, for one, am glad that ATX is charging it up front now because otherwise I have to pay it on my WI State Tax Return.; along with all my ebay and other purchases that do not charge sales tax.  One more end of year job that I don't need.

[kcjenkins]

I am waiting for more than just a brand new 1 post member's word that CCH is practicing things that are illegal in regards to sales tax.

 

Not doing something ILLEGAL, Jack, and he did not say they were, just taking an easy way [shipping the CD whether we want it or not] to save themselves the trouble of recording taxable or non-taxable.  Easytax is right,  "they do not offer anyway other than receiving the CD to buy the program", simply because that's easy for them.  

[Jack from Ohio]

Oh yeah... Also according to the FL DOR (and they offered this, I did not even ask), they (FL DOR) probably does not receive the FL sales tax from WK/ATX that we pay on these products, because it is not required.

Site showing map with legends showing taxability of software transactions:
http://taxfoundation.org/blog/states-sales-taxes-software