Forgeworld Charging Sales Tax for US Orders?

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**Kimchi Gamer**

Hey guys, I noticed that Forgeworld is now charging sales tax for orders from the US and it's bugging me more than it should. I asked them why they are charging me sales tax for a purchase I am making from California that is being purchased from and delivered from the UK. They directed me to their new sales tax faq page which states,

If you are shipping your goods to the US then Forge World will charge sales and usage tax in the States where Games Workshop has retail stores. In other States, no Sales Tax will be charged. As you proceed through check out this will be recalculated in accordance with the State regulations.

That is all fine and good if I was actually ordering product from a store in California and having it delivered to an address in California but why does that apply to a purchase from the UK which is even transacted in GBP? I asked them again to clarify why I have never been charged sales tax from any other UK or international company and was given this reply from their customer service

Thanks for getting back to us. The launch of the new Forge World web store has meant that all customers are now charged the appropriate tax required in their part of the world. This brings Forge World in line with the rest of Games Workshop in this respect. We regret that this change has impacted upon you but it was a necessary requirement we are obliged to fulfill. Once again, we appreciate your enquiry.

Ok, that still did not really answer my question and as I stated earlier is really bugging me for some reason. Does anyone have an explaination as to why they are charging sales tax to overseas customers now? I am most likely incorrect on this but would love an explaination as to why the sudden change?

**jonolikespie**

Kimchi Gamer wrote:
Thanks for getting back to us. The launch of the new Forge World web store has meant that all customers are now charged the appropriate tax required in their part of the world. This brings Forge World in line with the rest of Games Workshop in this respect. We regret that this change has impacted upon you but it was a necessary requirement we are obliged to fulfill. Once again, we appreciate your enquiry.

I'm very curious to know if this was a necessary requirement because the way they did it before was technically wrong, or if this is only necessary now with the new webstore for some reason.

**chaos0xomega**

I cannot say for certain that FW is required to collect a tax under these circumstances, what I can say is that if they are collecting these taxes, then they damned well better be paying it forward to Uncle Sam, otherwise it is illegal.

FW has always been kind of shady in that department IMO. At one time I know they were charging Americans for VAT, which they should not have been (by law), and there was a bit of a question as to whether or not they were actually reporting that to the UK gov't (as in it was believed they were illegally charging US customers VAT, but not reporting that to the gov't, thereby making an extra 17% or so in profit from unreported 'taxes' on the goods sold.

**Tannhauser42**

Isn't this the same thing Amazon ran into some years back? If they had a warehouse in your state, they had to charge you sales tax.

**Kimchi Gamer**

Tannhauser42 wrote:
Isn't this the same thing Amazon ran into some years back? If they had a warehouse in your state, they had to charge you sales tax.

Yes but that was for American customers purchasing from an American company. I think the hardest thing I'm wrapping my head around is why is a UK company charging me US sales tax for product being manufactured, purchased, and shipped from the UK?

**Ghaz**

Kimchi Gamer wrote:
Tannhauser42 wrote:
Isn't this the same thing Amazon ran into some years back? If they had a warehouse in your state, they had to charge you sales tax.

Yes but that was for American customers purchasing from an American company.

By that logic I should be able to walk into my local Games Workshop or IKEA and make a purchase without sales tax. What matters is if the company has a physical location within that state.

**Dax415**

Kimchi Gamer wrote:
Tannhauser42 wrote:
Isn't this the same thing Amazon ran into some years back? If they had a warehouse in your state, they had to charge you sales tax.

Yes but that was for American customers purchasing from an American company. I think the hardest thing I'm wrapping my head around is why is a UK company charging me US sales tax for product being manufactured, purchased, and shipped from the UK?

That's a really good point Kimchi, have you contacted the better business bureau? When it comes to taxes they may know about this.

**Ghaz**

From Internet Sales Tax: A 50-State Guide to State Laws (using my home state as an example):

The General Rule: Physical Presence in the State

The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a “physical presence.” The physical-presence rule is based on a 1992 United States Supreme Court decision, Quill Corp. v. North Dakota, that addressed the obligations of mail-order businesses to collect sales tax on out-of-state sales. The decision has been extended to include online retailers. Generally speaking, a physical presence means such things as:
•having a warehouse in the state
•having a store in the state
•having an office in the state, or
•having a sales representative in the state.

For basic guidance on how physical presence is determined specifically under Kentucky law, consult Section 139.340(2) of the Kentucky Revised Statutes (KRS), which defines “Retailer engaged in business in this state.” Note that the definition includes not only the bulleted items mentioned just above, but also those same types of items when maintained or controlled by “a subsidiary or any other related entity.” (More generally, KRS Chapter 139 is Kentucky’s sales and use tax statute; a main index to all the sections of the statute is available online.)

As you might expect, the corollary to the physical-presence rule is that, if you do not have a physical presence in the state, you generally are not required to collect sales tax for an Internet-based sale to someone in that state.

**Kimchi Gamer**

Ghaz wrote:
From Internet Sales Tax: A 50-State Guide to State Laws (using my home state as an example):

The General Rule: Physical Presence in the State

The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a “physical presence.” The physical-presence rule is based on a 1992 United States Supreme Court decision, Quill Corp. v. North Dakota, that addressed the obligations of mail-order businesses to collect sales tax on out-of-state sales. The decision has been extended to include online retailers. Generally speaking, a physical presence means such things as:
•having a warehouse in the state
•having a store in the state
•having an office in the state, or
•having a sales representative in the state.

For basic guidance on how physical presence is determined specifically under Kentucky law, consult Section 139.340(2) of the Kentucky Revised Statutes (KRS), which defines “Retailer engaged in business in this state.” Note that the definition includes not only the bulleted items mentioned just above, but also those same types of items when maintained or controlled by “a subsidiary or any other related entity.” (More generally, KRS Chapter 139 is Kentucky’s sales and use tax statute; a main index to all the sections of the statute is available online.)

As you might expect, the corollary to the physical-presence rule is that, if you do not have a physical presence in the state, you generally are not required to collect sales tax for an Internet-based sale to someone in that state.

Does this apply to international businesses?

**Ghaz**

Why wouldn't it? Why would an international business be exempt from sales tax online but still have to collect them at their physical stores in the state?

**Kimchi Gamer**

Ghaz wrote:
Why wouldn't it? Why would an international business be exempt from sales tax online but still have to collect them at their physical stores in the state?

I'm purchasing the products from the UK. They are not shipping me the product from the GW down the street, nor do they manufacture or distribute the product from the GW down the street. I am purchasing a UK product from a UK company where the product is manufactured and distributed, paying for the product in a foreign currency and the US collects sales tax on that?

**Ghaz**

Yes, you are purchasing products from the same company that owns the GW down the street. They have a physical presence in your state and are already set up to collect sales taxes in that state. Just because the product that you ordered online comes from out of state or out of the country makes no difference.

**Saldiven**

Ghaz wrote:
Yes, you are purchasing products from the same company that owns the GW down the street. They have a physical presence in your state and are already set up to collect sales taxes in that state. Just because the product that you ordered online comes from out of state or out of the country makes no difference.

This.

The entire purpose for these regulations is to prevent the state and local government from being denied sales tax revenue by a consumer opting to make an online purchase rather than purchasing at the store location down the street. Whether or not that store down the street is owned by a domestic or international entity is irrelevant.

**Kimchi Gamer**

Ok, I am satisfied with the explainations.

**Ghaz**

One final note. It is not the United States government that is charging the sales tax. It is the individual states that charge the sales tax, with some local counties/townships/cities/etc. adding an additional sales tax on top of that.

**DoomOnYou72**

Are they still charging US customers VAT. I ask because the price on the UK page and US page is the same. I was under the impression that the price includes VAT. I haven't checked out with the new store front. Does it remove it when you check out?

**Nuwisha**

Would be interesting to ask someone in the UK if they get hit with VAT taxes at the end as well.

**Cruentus**

Last time I ordered from FW, they did charge me the 20% VAT, and on the invoice, they showed an 8% state sales tax. It didn't increase my cost above what was on the GW site, but I assume they're collecting the "VAT" and then using some portion of that to pay the state sales tax.

They still shouldn't be charging us VAT at all. I'd rather pay 8% sales tax than the 20% VAT.

**TheCustomLime**

I don't believe California collects sales tax from online orders unless the business is based in Calfiornia. It may be unique in this regard.

**notprop**

As a general rule all Uk consumer prices will include VAT, unless stated.

VAT is usually seperated out at the checkout or on a receipt/invoice, but the total will be the same as the inclusive prices.

Business/industry will often operate with and show prices without VAT but that isn't relevant here.

**Ghaz**

TheCustomLime wrote:
I don't believe California collects sales tax from online orders. It may be unique in this regard.

My link above says that they do.

**TheCustomLime**

Huh, so they do. I guess I never noticed it before because I typically don't buy from companies that operate in California online

**Skinnereal**

I had the opposite.
I tried to order a downloadable PC game after being redirected to a US website (Digital River). The price was converted from USD to GBP, and an updated price was listed stating the added VAT.
I don't remember seeing this before, but I have heard that a lot of international sales regulations are being tightened up.

**Mymearan**

You don't have sales tax on import items in the U.S? Really? Damn I would love to not have to pay 25% on everything I get from abroad...

**Dramagod2**

Its probably because of the rise of amazon laws in the US which require online retailers to pay sales tax in a state in which they operate a b&m facility. Since GW has stores in most states and these laws have become more and more commonplace, it makes sense that they would need to charge for FW since its not completely rolled in with GW. Before they could probably argue it a separate company apart from the GW stores, but now that it's all rolled in together, they probably can't justify that a FW sale isn't a sale for GW. So they have to pay tax in any state that has an amazon law. If they are charging in the others, then it is their choice, but probably just easier on their end rather than breaking up the tax state by state.

After a little googling, I found that California does indeed have an Amazon Law. So any web purchase you make in that state from a site that has a real world structure or operating property in that state would be charged tax.

**Breotan**

Kimchi Gamer wrote:
If you are shipping your goods to the US then Forge World will charge sales and usage tax in the States where Games Workshop has retail stores. In other States, no Sales Tax will be charged. As you proceed through check out this will be recalculated in accordance with the State regulations.

Does this mean they'll remove VAT from their prices for us "sales tax" recipients?

**Mulletdude**

Breotan wrote:
Kimchi Gamer wrote:
If you are shipping your goods to the US then Forge World will charge sales and usage tax in the States where Games Workshop has retail stores. In other States, no Sales Tax will be charged. As you proceed through check out this will be recalculated in accordance with the State regulations.

Does this mean they'll remove VAT from their prices for us "sales tax" recipients?

I would hope they do. Hint: they don't. Buying the new suit from FW costs 250 pounds when shipping to the UK, and when I ship it to me it costs 270 pounds. This means the 'real' price of the suit is 200 pounds, and the taxes I should pay amount to 16.5. That means for me, living in Texas, pay a 35.3% tax on something from forgeworld. (because the VAT is included in the price @ 20%)

Automatically Appended Next Post:
And because I like to do some research on stuff like this, here is some interesting info.

http://www.revenue.ie/en/tax/vat/guide/exports.html wrote:For VAT purposes, exports are goods directly dispatched to a destination outside the EU VAT area. The term EU VAT area means the EU with the exception of those territories that in general are parts of EU Member States but are not regarded as being part of the EU for VAT purposes.
The zero rate of VAT applies to all supplies of goods that are transported directly by or on behalf of the supplier to a destination outside the EU VAT area.

So when Forge World charges VAT to non-EU consumers, they're actually just pocketing that 20% and screwing the consumer.

**RiTides**

This comes up a lot but is never addressed... I was really pleased to have another company (Gamemat.eu) remove VAT when you request an invoice from them and are outside the EU.

Shipping is already a killer - it would be great if FW would remove the VAT that they're not having to pay to the government anyway, rather than keep it for themselves...

**warboss**

I think iirc in another thread folks also posted that FW has begun using Fedex which also charges you an import brokerage fee as well.

**Talys**

I have posted this before. FW ticked me off pretty bad by triple charging me tax once, after the new web site came out.

I placed an order just over the GBP100 level to get the free shipping. Was charged 12% tax.

Because evidently the total weight was over a certain amount (there was a hardcover book), they sent it UPS. UPS charged me the SAME 12% tax (not duty, but actual taxes), and another $10 brokerage fee.

One model was defective. Emailed FW, they sent back a free replacement. Also via UPS. UPS charged me another 12% tax on the full price of the model, plus another $10 brokerage fee.

So I got charged $20 brokerage and 36% tax. Complained to FW, they've acknowledge I should not have been charged, but I haven't gotten my money back yet. That order was one of the ones placed around the same time FW's new website went up. Yippee, huh?

I have had no problems with the non-express orders, that go via post. I get charged 12% tax at the point of purchase, and that's it. I mean, I'm just fine with paying sales tax. I just don't want to pay it multiple times...