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Sales Tax.

MageOfBattlesMageOfBattles
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edited September 23 in General Chat
http://maplestory.nexon.net/news/52936/addition-of-sales-tax-when-purchasing-nx-us-canada

In case you haven't already read this lovely notice, Nexon NA is now suddenly legally required to add sales tax to NX bought from the website, and Karma cards redeemed on their website. Now I'm not going to act like I'm in any way an expert in this subject. So what I'm going to do is ask for a few answers, and perhaps a suggestion or two.

1. Why is Nexon suddenly "legally required" to add sales tax when this hasn't been an issue for the entire duration of the game to this point? I assume there's reasoning, so I think a lot of people would appreciate the explanation as to what caused this to happen. I am not going to campaign for this this change to be removed (seeing as if it's really legally required, there's nothing anyone can do), but I do want some form of explanation.

2. More of a suggestion, (but since this's for a general discussion of the subject I'm just gonna post this in general chat), I'd recommend applying the sales tax on the purchase of the card itself, and not upon redeeming the code. As it stands right now, nx conversion from karma cards are all over the place, it's inconsistent, and it's not clear how much nx one will be receiving. Again, if there are measures into place from preventing this inconsistency, or at least informing the player/buyer, I'm sure again, a lot of people would appreciate that knowledge.

This is not something that should be thrown casually into the player's face. This is a matter that should be given more attention and a lot more transparency. Again, I am not campaigning for this to be changed. I just don't want this to be swept under a rug.
luna02Skyfall1989MarkswomanSpinKuronekonova

Comments

  • KingofFurriesKingofFurries
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    edited September 23
    What i think would be the best option, assuming they are legally required to add tax, is take one uniform tax rate based on California where the HQ is, that way its at least more consistent when redeeming nx. in my state, its 6%, but in other states its more, and others its less. and for Canada, i hear its like 12%. this is just ridiculous having it be all over the place.

    even still, this whole tax thing is stupid. you're telling me now when i buy a 100k NX KK card i'm only going to get 94k NX from it? what if i say im from a state / country with little to no sales tax? then i can get more nx for my money? this just makes people want to commit fraud now for more nx its stupid.

    if Nexon was a good company, they'd figure out a way to compensate for the new sales tax, considering we never had it before. we were all used to getting 100k nx for $100 but that's suddenly going to change. the easiest thing to do would be to charge tax based on California's rate, then lower everything by whatever the tax in California is that way even if we don't get 100k nx for $100 anymore, it still feels the same. Alternatively, they could maybe give "bonus nx" based on the tax you get charged to make up for the lost NX on the tax.

    Another thing i find to be stupid though, is charging tax for something already bought. You're telling me, i can buy a KK card with no tax ($25 = 25k) then you guys are charging me tax for that? unbelievable...

    These are just my thoughts tho. personally i hate the idea of this new sales tax, it means i get less NX for my money and honestly just makes me want to spend less on this game knowing I'm not getting the same amount of NX anymore. what especially irritates me though is the inconstancy; my state gets charged 6%, other states get charged more, other states get charged less, or even no sales tax. some countries have no sales tax, and then you have places like Canada that get charged like 12% ON TOP OF the conversion rate.
    luna02MarkswomanSpin
  • NeospectorNeospector
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    edited September 23
    1. Why is Nexon suddenly "legally required" to add sales tax when this hasn't been an issue for the entire duration of the game to this point? I assume there's reasoning, so I think a lot of people would appreciate the explanation as to what caused this to happen. I am not going to campaign for this this change to be removed (seeing as if it's really legally required, there's nothing anyone can do), but I do want some form of explanation.

    Because the law changed, most likely. Tax laws especially constantly shift around as states and governments need money.
    FuhreakKingofFurriesYinYangXKuronekonovadarik
  • MageOfBattlesMageOfBattles
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    edited September 23
    Neospector wrote: »
    1. Why is Nexon suddenly "legally required" to add sales tax when this hasn't been an issue for the entire duration of the game to this point? I assume there's reasoning, so I think a lot of people would appreciate the explanation as to what caused this to happen. I am not going to campaign for this this change to be removed (seeing as if it's really legally required, there's nothing anyone can do), but I do want some form of explanation.

    Because the law changed, most likely. Tax laws especially constantly shift around as states and governments need money.

    Even if that ends up being the case, I still wish they would be more clear. All it would take would be, "Due to a change in tax laws", or something simple like that would be able to shed more light on the subject. Nexon has a bad history of poor wording when it comes to their web posts, I just want more clarification on something as large a change as this is.
    FuhreakKingofFurriesHuskyDM
  • KittiesKitties
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    edited September 23
    I think it is odd too that the tax is applied upon redeeming a prepaid card since in a few places you may get charged tax upon purchasing the card.
    So essentially you could end up being double taxed depending on your circumstance.
    Of course, on the other hand I understand that getting into tax trouble is not what Nexon wants to deal with.
    Many online vendors have added a form of tax to their services so Nexon was coming eventually.
    FuhreakMarkswomanSpinHuskyDM
  • AKradianAKradian
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    edited September 23
    https://old.reddit.com/r/Maplestory/comments/d8gy8d/ah_yes_i_also_forget_to_do_my_taxes_for_15_years/f1ahj6j/
    U.S. Supreme Court ruling South Dakota v. Wayfair, Inc. in 2018 ruled that "states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state." As a result of this ruling, states began changing their laws regarding state taxes so this year, we saw companies making changes because of this. Riot Games implemented something similar this year as well:
    https://support.riotgames.com/hc/en-us/articles/360017537854/
    https://na.leagueoflegends.com/en/news/store/store-update/rp-update-cost-and-refunds

    So, this is a new law (or rather, new interpretation of existing laws). Your state wants X number of cents out of every dollar you spend, regardless of whether you're buying from a local or out-of-state business. So, Nexon America is legally required to send your state those X cents out of every dollar you give them.

    I don't really understand the taxing of Karma Koin, since you do not give Nexon any money when charging Karma Koin to your account. You give it to a seller when you buy the Karma Koin, whether it is a physical store (like CVS) or an online store (like PCGameSupply). Those stores are the ones who should be charging the tax and passing it on to the states.

    Also, while Nexon is legally obligated to give your state part of the money you pay Nexon, they are at liberty to credit whatever number of NX they want to your account. They could, if they wanted, still credit you with 1,000NX per US dollar spent, even if they don't get to keep the entire dollar to themselves.
  • ChidorifullChidorifull
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    I live in Canada and i already get taxed when i use a karma koin, so does this mean im gonna get doubled taxed for something i already payed for?
  • darikdarik
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    edited September 23
    Dude they mentioned it on the note, DUE TO LEGAL REASONS WE ARE NOW OBLIED TO ADD A TAX, wtf do u want to tell u? The exact law and all that ? Just search it for urself, dont expect to be given everything in life , do a SMALL effort and search it ffs...
  • HHG1HHG1
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    edited September 24
    It was unclear from the notice but will I, as a European, get taxed when redeeming a USD KarmaKoin code purchased from Offgamers or PCGameSupply for example, or will I also be prompted to select my country before redeeming.

    I won't pretend to understand US tax laws but shouldn't the sales tax be added to the price of KarmaKoin cards at the retailers in the affected states/countries (like it apparently already is in some cases), and not be deducted from the virtual currency provided?
  • AKradianAKradian
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    edited September 24
    HHG1 wrote: »
    It was unclear from the notice but will I, as a European, get taxed when redeeming a USD KarmaKoin code purchased from Offgamers or PCGameSupply for example, or will I also be prompted to select my country before redeeming.

    I won't pretend to understand US tax laws but shouldn't the sales tax be added to the price of KarmaKoin cards at the retailers in the affected states/countries (like it apparently already is in some cases), and not be deducted from the virtual currency provided?

    From what I understand, as a European you will not be taxed (unless your country requires its own sales tax).

    As for the Karma Koin question (which I also asked, with other wording, upthread):

    Apparently, in the USA, gift cards in general are not taxed when they are sold, but what you buy with them is.
    https://www.ricksdailytips.com/no-sales-tax-on-gift-cards/
    So, for example, if a state has a 10% sales tax, you will still only pay $10 to buy a $10 card, without an additional $1 tax. However, when you want to use that card to buy an actual item at a store, you'll only be able to buy an item that costs $9, because the tax will be added at the checkout. This is the same thing that would happen if you had a $10 bill in your hand, rather than the $10 card. (In the USA, stores always list/display prices before tax.)
    With Karma Koin, the "item at the store" that you are buying, is NX. Imagine NX as candy that you buy in bulk, $1 per kilogram. Your $10 gift card can only buy about $9 worth of candy - 9091 gm to be exact - because tax is added on top of the listed price at checkout.
    darik
  • JezJez
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    edited September 24
    AKradian wrote: »
    .... Your $10 gift card can only buy about $9 worth of candy - 9091 gm to be exact - because tax is added on top of the listed price at checkout.

    this is ridiculous, time to throw the the cards in the harbor and start a revolution
    MarkswomanSpin
  • TwilightHimeTwilightHime
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    edited September 24
    darik wrote: »
    Dude they mentioned it on the note, DUE TO LEGAL REASONS WE ARE NOW OBLIED TO ADD A TAX, wtf do u want to tell u? The exact law and all that ? Just search it for urself, dont expect to be given everything in life , do a SMALL effort and search it ffs...

    Yes, they should be telling users exactly what laws they are complying with, if anything has changed.

    If a random guy stopped you on the street and said for "legal reasons" he has to check your belongings, do you just assume he's right?
  • JezJez
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    edited September 24
    yeah, it makes zero sense to deduct an amount of virtual currency from the card instead of just charging tax at the retailer. deducting an amount of nx is kinda scummy tbh.
    MarkswomanSpin
  • TwilightHimeTwilightHime
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    edited September 24
    Jez wrote: »
    yeah, it makes zero sense to deduct an amount of virtual currency from the card instead of just charging tax at the retailer. deducting an amount of nx is kinda scummy tbh.

    Retailers should not be taxing gift cards in canada/US. If you buy a $50 card, it should cost $50 to buy the card.
  • AKradianAKradian
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    edited September 24
    Jez wrote: »
    yeah, it makes zero sense to deduct an amount of virtual currency from the card instead of just charging tax at the retailer. deducting an amount of nx is kinda scummy tbh.

    Again, that's just the way things are done in the USA
    https://www.csmonitor.com/Business/Saving-Money/2014/0826/Gift-cards-and-sales-tax-How-not-to-get-duped
  • JezJez
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    edited September 24
    AKradian wrote: »
    Jez wrote: »
    yeah, it makes zero sense to deduct an amount of virtual currency from the card instead of just charging tax at the retailer. deducting an amount of nx is kinda scummy tbh.

    Again, that's just the way things are done in the USA
    https://www.csmonitor.com/Business/Saving-Money/2014/0826/Gift-cards-and-sales-tax-How-not-to-get-duped


    our taxes are not paid in NX
  • StarryKnightStarryKnight
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    edited September 24
    Except that NX is not an item, its a form of currency. In game currency yes, but currency all the same. Charging tax to exchange forms of currency doesn't really make sense. If I buy a gift card that only works at a local restaurant, it doesn't get taxed, because tax will be applied when I go to the restaurant and purchase the meal., The form of currency in this example, such as a gift card that only works for a specific retailer, is no different than NX.

    So technically the tax, if applicable, should only be applied the moment an item is purchased from the cash shop, when goods are actually exchanged for the currency.

    You could argue that In the end you end up losing the same amount of money in tax, so I understand it's probably *easier* to calculate tax when purchasing NX, I'm just pointing out that technically this doesn't seem to be the correct way to do it, as its still technically a gift card, just because its for a specific retailer doesn't mean its not a gift card.
  • TwilightHimeTwilightHime
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    edited September 24
    Except that NX is not an item, its a form of currency. In game currency yes, but currency all the same. Charging tax to exchange forms of currency doesn't really make sense. If I buy a gift card that only works at a local restaurant, it doesn't get taxed, because tax will be applied when I go to the restaurant and purchase the meal., The form of currency in this example, such as a gift card that only works for a specific retailer, is no different than NX.

    Could it not be classified as an item that is used to exchange with other items? Technically everything can be considered currency.
  • MageOfBattlesMageOfBattles
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    edited September 24
    darik wrote: »
    Dude they mentioned it on the note, DUE TO LEGAL REASONS WE ARE NOW OBLIED TO ADD A TAX, wtf do u want to tell u? The exact law and all that ? Just search it for urself, dont expect to be given everything in life , do a SMALL effort and search it ffs...

    Hey now, quite the over reaction there. It should not be my responsibility to be informed of the entire process that led to this decision. Yes, they mentioned legal reasons, except if you think about it for a second longer, "legal reasons" could mean any number of thing. It should fall on the company to inform their customers of change, and reasons behind changes. I have said it repeatedly, I am only asking for this situation to be made as clear as possible. If you have an issue with that, deal with it. This is something that affects maplers heavily, and I'm treating it as such. About 95% of that web post was explaining what was happening, not why it was happening. And I would love to hear their reasoning for their strange methods of taxing the Karma cards. As Kradian said, the exchange of money is happening when you buy the karma card, not when you redeem the code.
    MarkswomanSpin
  • MarkswomanSpinMarkswomanSpin
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    edited September 24
    I live in the U.S. and I've been playing Maple and frequently buying NX (or Karma Koin cards) since 2006.

    If I buy a Karma Koin card, the tax should be charged at the point of sale just like any other purchase, not upon redemption on the Nexon website.

    I think I've finally found the reason to no longer purchase NX or KK cards.
    MageOfBattles
  • StarryKnightStarryKnight
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    edited September 24
    Could it not be classified as an item that is used to exchange with other items? Technically everything can be considered currency.
    If this were the case, we would pay taxes for the KK card when we purchase them from a local retailer. In which case Nexon wouldn't need to develop a system where they award less NX based on local taxes, because taxes would already be paid at the state level to the retailer. Since we do not pay taxes at the state level at a retailer when we purchase the card, they are clearly classified as gift cards, not items. At best one could try and argue that the act of redeeming the code in exchange for the NX is the point at which the gift card is exchanged for an item, but then the problem is that the advertising is now false, because you do not receive the quantity of the item listed on the package, and since NX is not a legal tender of which one could pay taxes, it makes no sense to award less NX.

    Rather Nexon should simply re-evaluate the value of NX with respect to the tender used, award the same NX, and pay the taxes as normal. (meaning items in the cash shop might cost 100 more NX per 1k nx or something, depending on where you live, but you get the exact amount of NX listed on the card)

    Hopefully that makes sense.