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So, I hadn't purchased anything from Forge World since their website redesign late last year. I've made plenty of purchases prior to that. I've always been frustrated that they charge VAT on foreign sales and don't even participate in the VAT refund program. If you're a foreign visitor to the UK and you make major purchases while in country you can apply for a refund of VAT when you leave the UK and the company participates in the program.

Anyway, I placed an order earlier this week and got charged VAT and Sales Tax. This is a bit much. My understanding is that unless FW has a business presence in California (not a parent company relationship) that they are not required to charge sale tax. Also, because the goods being exported appear to be zero-rated, I don't believe that FW needs to collect VAT on exports to the US. Any international tax lawyers that can chime in on this one?

I may be wrong, but didn't California pass a law mandating sales tax be applied to online purchases? I just did an order Wednesday here in Idaho, and I got no tax charge.

 Brennonjw wrote:
I may be wrong, but didn't California pass a law mandating sales tax be applied to online purchases? I just did an order Wednesday here in Idaho, and I got no tax charge.

They did, if the online company has a brick and mortar store in state as well. As of 2012 that was expanded to cover the concept of a business Nexus (which was targeting Amazon and it's affiliated sellers). However, I can't find any legal changes that went into affect in 2016 that changes that. My understanding is that FW is still a wholly owned subsidiary and separate entity from GW and therefore I can't make the connect on why sales tax would have not been collected mid-2015 but now collected in early 2016.

It's in their current T&C

http://www.forgeworld.co.uk/en-EU/Taxes-and-Charges;jsessionid=0711791B8C97FB65B5906C5E9FDB1E1C

US Shipments

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.

Web Store Prices

Forge World prices are quoted on its web store in accordance with the requirements in the country of the web store. These are as follows: US and Canadian Web Stores

All prices are quoted exclusive of any taxes. If any sales taxes apply to an order these will be an additional charge. These are determined by the destination to which the goods are sent (see taxes that apply to your purchase).

Edit: but this doesn't help explain why this is if they didn't used to do that before

Probably got a nasty letter from the IRS.

Do US GW stores supply anything from Forge World?

If so all it might take is them to be supplied at more preferential terms than an non-GW business to entangle them in a shared enterprise in the states tax depts. eyes I wouldn't be surprised

 Brennonjw wrote:
I may be wrong, but didn't California pass a law mandating sales tax be applied to online purchases? I just did an order Wednesday here in Idaho, and I got no tax charge.

Yep, this. I honk were the only state to do so this far. Not hat all websites put any attention to it. I'm fairly surprised Forgeworld has this tax dialed in.

Here's a LINK to a discussion we had on the matter last year.

 OrlandotheTechnicoloured wrote:
Do US GW stores supply anything from Forge World?

If so all it might take is them to be supplied at more preferential terms than an non-GW business to entangle them in a shared enterprise in the states tax depts. eyes I wouldn't be surprised

My guess is yes, but they have sold things like Imperial Armour in there stores as far back as 2012, if not before here in California and never collected sales tax previously. They subsequently stopped selling FW in stores, so maybe this is a sign that they're gearing up to do it again?

Okay, so why VAT too? From my research, albiet limited, they don't have too...


Automatically Appended Next Post:

 Ghaz wrote:
Here's a LINK to a discussion we had on the matter last year.

Yeah, read this, but it fails to actually go into the tax law issues. Mostly people pointing at T&Cs and repeating what GW legal counsel wrote, which is as likely legal interpretation and not fact. FW is a subsidiary of GW, not the same legal entity. The 2012 CA law about business nexus might apply, but the prior statute does not.

I suspect that the CA tax offices sent a letter to every company demanding they pay sales taxes regardless of what the law says and it is a lot cheaper to just comply and pass the fees on to the customer than it is to fight the state on their own laws. From my understanding CA pulls that kind of stuff a lot, and the PA DMV pull similar things, like not accepting cash at their offices which is so illegal it is hilarious. What used to be called INS also blatantly ignores the law in a few different places.

At any rate, the take home message is that the law doesn't matter to those who break it and those who make it.

 drazz wrote:

 Brennonjw wrote:
I may be wrong, but didn't California pass a law mandating sales tax be applied to online purchases? I just did an order Wednesday here in Idaho, and I got no tax charge.

Yep, this. I honk were the only state to do so this far. Not hat all websites put any attention to it. I'm fairly surprised Forgeworld has this tax dialed in.

Nope, it's happened to me in NC.

 Wehrkind wrote:
I suspect that the CA tax offices sent a letter to every company demanding they pay sales taxes regardless of what the law says and it is a lot cheaper to just comply and pass the fees on to the customer than it is to fight the state on their own laws. From my understanding CA pulls that kind of stuff a lot, and the PA DMV pull similar things, like not accepting cash at their offices which is so illegal it is hilarious. What used to be called INS also blatantly ignores the law in a few different places.

At any rate, the take home message is that the law doesn't matter to those who break it and those who make it.

You mean you're going to post something on the Internet with zero evidence and back it up with your understanding as evidence? Then you're going to make a corellary to another state with a different structure of government thousands of miles away and then suggest that another government infraction related to accepting cash is in anyway relevant. Then you're going to suggest that the Federal immigration agency's alleged violation of law has anything to do with the California State Board of Equalization?

No, say it isn't true. No wonder everything on the Internet must be true...

If you can't tell, I find your entire post to be nonsense and not the least bit factual as it relates to this matter. It is not helpful. Please go troll someone else's thread.

Let's try again.
I said I suspected something happened, based on anecdotal evidence from other people about the same thing. I then stated an example of another state agency ignoring the law for their convenience. Not a corollary, but another example of such an occurrence. The INS is another example of a governmental organization that doesn't bother to follow the rules (I have direct personal experience with how they handle citizenship applications.)

What is it you want from an international tax lawyer to tell you? That you can get your sales tax back from someone? Are you willing to go to court to recover that money? I'd be rooting for you if you did, but I don't think you will be successful. But hey, best of luck, you charming fellow you!

Same thing here in VA. They opened a GW store in VA Beach last year and now FW has to charge sales tax. Glad it wasn't open.when I ordered the warlord titan. The fact that GW opened that store is now providing negative value to customers. You can't buy fw stuff there and they make online orders more expensive plus they charge full retail.

 MajorWesJanson wrote:
Same thing here in VA. They opened a GW store in VA Beach last year and now FW has to charge sales tax. Glad it wasn't open.when I ordered the warlord titan. The fact that GW opened that store is now providing negative value to customers. You can't buy fw stuff there and they make online orders more expensive plus they charge full retail.

What? I lived in Va Beach until 2010. Used to game at Atlantis and Hobbytown. A GW store opening just sounds like bad business for the already established small businesses that were doing well with their sales and events.

 MLaw wrote:

 MajorWesJanson wrote:
Same thing here in VA. They opened a GW store in VA Beach last year and now FW has to charge sales tax. Glad it wasn't open.when I ordered the warlord titan. The fact that GW opened that store is now providing negative value to customers. You can't buy fw stuff there and they make online orders more expensive plus they charge full retail.

What? I lived in Va Beach until 2010. Used to game at Atlantis and Hobbytown. A GW store opening just sounds like bad business for the already established small businesses that were doing well with their sales and events.

I had to look it up to see why fw was charging me sales tax the other day.
I know Atlantis is still doing OK but I am on the peninsula so I game up here at Jerseys.

GW is FW, FW is GW. They're not a separate company, a parent company, or subsidiary. They are wholly owned. I'm sure there's a legal term for it, but there it is. GW has retail locations in CA, so you pay CA sales tax. As to why it's being collected now and not in 2012, it's because a bunch if states' Attorneys General got together a few years ago and sent letters to every company doing business in their state and told them to not try and skirt the law "or else." So, now e-commerce websites do it as a matter of course.

Besides, I thought people in Cali loved paying taxes? All those social and environmental programs don't pay for themselves, yo.

 Wehrkind wrote:
What is it you want from an international tax lawyer to tell you? That you can get your sales tax back from someone? Are you willing to go to court to recover that money? I'd be rooting for you if you did, but I don't think you will be successful. But hey, best of luck, you charming fellow you!

I wanted to understand if there was a new law, which I'm now reasonably sure there is not. So, then I wanted to know if what they are doing now is legal, or have they been violating state law since at least 2012. Technically, if they didn't collect sales tax since 2012, and should have been, then I'm obligated to remit sales tax to the CA BOE for all of my past purchases circa 2012-2015.

I still want to know what they're collecting VAT for product being shipped out of country that appears to be eligble for VAT-zero.


Automatically Appended Next Post:

 the_Armyman wrote:
GW is FW, FW is GW. They're not a separate company, a parent company, or subsidiary. They are wholly owned. I'm sure there's a legal term for it, but there it is. GW has retail locations in CA, so you pay CA sales tax. As to why it's being collected now and not in 2012, it's because a bunch if states' Attorneys General got together a few years ago and sent letters to every company doing business in their state and told them to not try and skirt the law "or else." So, now e-commerce websites do it as a matter of course.

Besides, I thought people in Cali loved paying taxes? All those social and environmental programs don't pay for themselves, yo.

Thanks for the clarification on the legal formation of the operating entity.

Do you have a link to the Attorney's General action?

See my note below about liability. I have not problem paying taxes for services provided.

 punchdub wrote:
I still want to know what they're collecting VAT for product being shipped out of country that appears to be eligble for VAT-zero.

They're not collecting VAT. They're just charging you 20% more.

I thought California required all residents to pay their use tax on their personal income tax returns. If you bought the items in a retail store, would you have paid taxes? If so then you should be remitting a use tax. You don't have to report individual purchases unless you opted not to use the table.

Description of Use Tax for your personal return.
https://www.boe.ca.gov/sutax/usetax.htm#Personal

Use Tax table
https://www.boe.ca.gov/info/use_tax_table.html
If you have purchases greater than $1,000, then you should calculate the tax on that item and add it to the amount on the table per the instructions on the return.

 Abadabadoobaddon wrote:

 punchdub wrote:
I still want to know what they're collecting VAT for product being shipped out of country that appears to be eligble for VAT-zero.

They're not collecting VAT. They're just charging you 20% more.

My answer was going to be "because they can", but you've basically hit the nail on the head. GW's main site used to deduct VAT for overseas purchases but this stopped after the last redesign because someone must have realized there's nothing illegal about just leaving it in and just telling HMRC that they charge foreign buyers more for the same item "to cover shipping" or for no good reason.

 Ghaz wrote:
Here's a LINK to a discussion we had on the matter last year.

Moved to Dakka Discussions since this isn't a new development (although still worth discussing).

 MajorWesJanson wrote:
Same thing here in VA. They opened a GW store in VA Beach last year and now FW has to charge sales tax. Glad it wasn't open.when I ordered the warlord titan. The fact that GW opened that store is now providing negative value to customers. You can't buy fw stuff there and they make online orders more expensive plus they charge full retail.

Like the original poster, it is your responsibility to pay the Use Tax on your purchases if no tax is paid on your purchase. Per the State of Virginia, "If the total amount of purchases was from out-of-state mail order catalog(s) only, and $100 or less for the entire year, you do not have to pay the use tax. If the purchases were from out-of-state mail order catalog(s) and exceed $100, or the purchases were of any amount from sources other than mail order catalogs, then you must report these purchases and pay consumer's use tax on the total amount of all untaxed purchases from all sources made during the calendar year. Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from consumer use tax."
Source: http://www.tax.virginia.gov/content/consumers-use-tax

You should be filing the attached form for your use tax in Virginia.
http://www.tax.virginia.gov/sites/tax.virginia.gov/files/taxforms/income-tax/2014/cu-7-and-instructions-2014.pdf

If you did not and you are audited by the State of Virginia, then you could be required to pay the use tax plus penalty plus interest (all of these fees can add up and be in excess of 30%). It gets really nasty if you're a business and are not paying use tax. http://www.tax.virginia.gov/content/penalties-and-interest

The issue comes down to the fact the Company has determined they have nexus in both California and Nevada. As a result, the Company is required to collect the tax on your behalf and remit it to the state. There are ways to get around it (ie create a separate company to perform all online transactions on behalf of your retail stores) but a lot of the States have determined they are losing revenue as the trend shifts from brick and mortar to online sales. The States will continue to do what they need to because they are seeing a larger decline in sales tax as this shift continues.

 the_Armyman wrote:
GW is FW, FW is GW. They're not a separate company, a parent company, or subsidiary. They are wholly owned. I'm sure there's a legal term for it, but there it is.

Yeah, as far as I can see Forge World is just a brand, not a separate entity. If you order something from FW, all the terms and conditions refer to GW. If you look up the company registration number that they give you on the invoice when you buy something "FW", the company is GW. If you try and find a registered entity named "Forge World", you won't find one (unless it's under some other name I don't know about).

Actually, legally speaking, EVERYONE in the US must pay state sales tax on EVERYTHING they buy on the internet, even if they don't charge you sales tax when you buy it.

If you didn't all ready pay sales tax on an item you are legally required to disclose this on your income tax forms. The thing is, no one really knows this, and even if they do they ignore it. The government really doesn't inforce it anyway.

 cuda1179 wrote:
Actually, legally speaking, EVERYONE in the US must pay state sales tax on EVERYTHING they buy on the internet, even if they don't charge you sales tax when you buy it.

If you didn't all ready pay sales tax on an item you are legally required to disclose this on your income tax forms. The thing is, no one really knows this, and even if they do they ignore it. The government really doesn't inforce it anyway.

Except resident of Alaska, Delaware, Montana, New Hampshire, and Oregon who do not have statewide sales tax, and residents of states who have exemptions for sales tax for certain items. Other than those exceptions, everyone and everything.

Yeah, the current state of sales and use taxes for online purchases is kind of a mess. Because yes, most purchases that you didn't pay a sales tax on you're supposed to disclose that and pay the use tax. I seriously doubt that even 1% of citizens actually do this.

I'm in BC, Canada, and FW started charging taxes when they switched to the new website.

Previously, there was no tax from FW, but the carrier or post office sometimes required tax. Now, FW always charges it, and sometimes, the carrier or post office requires it *again*. It's crazy. And to get part of it back (or not), it takes, like, a dozen emails back and forth with FW. They don't seem to even understand what I'm trying to say, even though it's as clear as day from the shipping documents that I'm paying exactly the same 2 taxes (federal and provincial) two times -- 24% =X.

 TheWaspinator wrote:
Yeah, the current state of sales and use taxes for online purchases is kind of a mess. Because yes, most purchases that you didn't pay a sales tax on you're supposed to disclose that and pay the use tax. I seriously doubt that even 1% of citizens actually do this.

Sounds like there should be some sort of tax reform to account for the way business is done these days. It's hard enough for local business who have more overheads having to deal with competitors who don't charge tax.

Wasn't there a time in US history when there wasn't any sales or income taxes and it all came from import and export taxes?


Automatically Appended Next Post:

 Talys wrote:
I'm in BC, Canada, and FW started charging taxes when they switched to the new website.

Previously, there was no tax from FW, but the carrier or post office sometimes required tax. Now, FW always charges it, and sometimes, the carrier or post office requires it *again*. It's crazy. And to get part of it back (or not), it takes, like, a dozen emails back and forth with FW. They don't seem to even understand what I'm trying to say, even though it's as clear as day from the shipping documents that I'm paying exactly the same 2 taxes (federal and provincial) two times -- 24% =X.

Ouch, that sounds crazy. I haven't ordered anything from FW recently to know if they've started charging tax on Australian purchases. They shouldn't be on orders less than $1000.

AllSeeingSkink wrote:

 TheWaspinator wrote:
Yeah, the current state of sales and use taxes for online purchases is kind of a mess. Because yes, most purchases that you didn't pay a sales tax on you're supposed to disclose that and pay the use tax. I seriously doubt that even 1% of citizens actually do this.

Sounds like there should be some sort of tax reform to account for the way business is done these days. It's hard enough for local business who have more overheads having to deal with competitors who don't charge tax.

Wasn't there a time in US history when there wasn't any sales tax and it all came from import and export taxes?

It's further complicated by many vendors not requiring tax registration if they don't sell over a certain amount in that jurisdiction. This is actually a pretty reasonable thing. For example, if I were a little online store and sold stuff in Washington State, I might only make 3 sales a year for a total of $250 over 12 months. Do I really need to register and send quarterly or even annual reports? If I did, and wanted to sell in the USA, this would mean I'd have to prepare at least 50 tax reports for 50 states -- which would be crazy, seeing as 38 of them might be NIL for most years.

This is the same thing in Canada; small vendors selling, even through Amazon, don't charge tax because they don't sell the minimum amount.