iTunes illegally charging tax

[gprellwitz]

I renewed my subscription today for ForeFlight, and the Apple iTunes store tacked on almost $10 in tax. But here in Illinois, downloaded software, data, etc. is not taxable, as it is not "tangible general merchandise."

I've submitted a complaint with iTunes, so we'll see what happens. If you've purchased from iTunes, especially a high-ticket item like ForeFlight, WingX, etc., you might want to check your receipt and the tax laws in your state.

I contacted the IL Dept of Revenue to confirm the taxability and they actually got back to me within four minutes!

REV.TA-Sales REV.TA-Sales@illinois.gov

12:36 PM (0 minutes ago)

to gprellwitz

Dear Taxpayer,

No, it is not taxable.

Thank you,
Denice


-----Original Message-----
Sent: Friday, May 03, 2013 12:32 PM
To: REV.TA-Sales
Subject: Web Question

Is downloaded software, music, and data considered "tangible personal property" and thus subject to sales and/or use tax?

 

[masloki]

In the future, consider ordering via the Foreflight site directly. The Apple tax on developers is 30%.

 

[Archammer]

It doesn't matter what the developer/proprietors franchise or business taxes are. They cannot pass that onto the consumer in the form of tax! That is a business cost, and would be written into the RSP. They cannot charge a sales tax unless that state allows out-of-state taxation.

We noticed it the other night with my wife's music she bought. Texas doesn't allow out-of-state taxation either. Only in-state sales tax. We're researching as well. Will get back with news.

 

[jesse]

I doubt Apple is taxing incorrectly. They've probably had at least one lawyer look at this. But I'll be curious to hear what you find.

 

[darrell]

If Apple has a retail store in that state, then they can charge tax for online sales in that state as if it was an in-state sale.

 

[Skylane81E]

If Apple has a retail store in that state, then they can charge tax for online sales in that state as if it was an in-state sale.

Only if the product in question is taxable

 

[gprellwitz]

If Apple has a retail store in that state, then they can charge tax for online sales in that state as if it was an in-state sale.

Only if the product in question is taxable

That is the real question, and when I contacted the state they said it isn't. I figure that they've collected around $30 from me so far as "tax" that shouldn't have been collected. Would be interesting to know if it was actually remitted to the state! Apple does have a nexus in Illinois, so if it is truly a taxable. Item, the they definitely need to collect it.