77 lines
3.8 KiB
Plaintext
77 lines
3.8 KiB
Plaintext
I M P O R T A N T N E W S R E L E A S E
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F R O M M O D E M N E W S M A G A Z I N E
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September 10, 1991
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ModemNews recently became aware of the following message, among many
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that have been circulating on the boards recently;
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Dave Harnett #1 @9450 Tue Aug 27 19:26:21 1991
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Information from the New York State of Taxation and Finance
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(publication number N-91-34 ? dated 7/91)
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"Effective September 1, 1991, all prewritten software will be
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subject to New York State and local sales tax. The sale of
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prewritten software includes any transfer of title or possession,
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any exchange, barter, rental, lease or license to use, including
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merely the right to reproduce. The only software which will now be
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considered exempt is software designed or written to the
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specification of a specific purchaser. The medium by which the
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software is transferred to the purchaser has no effect on its
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taxability."
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Okay, so there you have it in part. Many readers called us and asked
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our opinion on the subject and we have done better than that, we have
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gone right to the New York State Division of Tax and Finance.
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According to Spokesperson Paul Rickard, the writer of the previous
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message is correct, yet the interpretaion is not nearly as sinister as
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it seems. Let us try to explain to you what this new tax statute will
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mean to the average SysOp and BBS caller in the Empire State.
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What this law does, is simply add software to the list of items which
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is now covered by the NYS Sales Tax laws. Just as you would pay State
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sales taxes on software you purchase in a retail store, so you would
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now also pay sales taxes on software that was written and sold to a
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customer in New York State.
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This means that as an author of software, you are now responsible to
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collect the normal sales tax due the state. For example, you create
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a software package called "FILENAME", and you live in Albany, New
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York. You release this software as shareware and it finds it's way
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onto BBS's across the state and across the nation. So far, no
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problem. John Doe of Binghamton downloads this software from a BBS,
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likes it, and does his duty and sends you the registration fee. At
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this point, since the SALE WAS MADE WITHIN THE STATE OF NEW YORK, you
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are responsible to collect sales taxes on that sale. Simple. Had the
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purchaser been a resident of Albuquerque, you would not have to
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collect sales taxes from him.
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What does this mean for SysOps? Here is where things get confusing.
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If a System Operator considers his BBS as "hobby", this means that he
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does NOT use the BBS as a business expense, and does not solicit fees
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for use of the system, he will still fall outside this new statute and
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nothing need change. If however, the SysOp does solicit funds to run
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his BBS, then he is classified as an "Information Service" and then
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must collect sales taxes on the received fees and file his BBS
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activities along with his NYS Tax forms, usually as a simple business.
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To sum this all up in a manner that all will understand, the simple
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transfer of files between a BBS and a caller may remain unaltered and
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unchanged in the current manner. However, if a software author
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resides in New York State and he sells his software to a user who
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LIVES IN New York State, then he is required, by law, to collect sales
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taxes on that sale, just as any other small or large businessperson.
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If we at ModemNews can be of further service to you, either in
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interpreting this statute, or in getting you further information
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please feel free to contact us either at our BBS (516) 679-0674 or via
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our Conference on RelayNet.
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Jeff Green, Publisher
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ModemNews Magazine
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