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How PS4 players are avoiding PlayStation Network sales tax

 how to avoid psn tax

It’s totally illegal to avoid PlayStation Network sales tax which has rolled out across many States in the U.S., with more regions now being included as from April 2017, but some unscrupulous players have found a way around it, thus reducing the amount they have to pay for the games they download on the PlayStation Network.

The sales tax applies to anything you buy from the PlayStation Store, so any item purchased from PlayStation Vue, PlayStation Now, PlayStation Music and PlayStation Plus either is right now, or will be affected by the US tax in certain States. You’ll see the additional tax price underneath the price of the game when you check out at the Store.

Apparently, players are taking the following steps to avoid PlayStation Network sales tax.

1. Setting up a billing address on their PSN account that is in a State or Country which doesn’t require you to pay PlayStation Network tax, such as the UK.

2. Instead of using a credit card or debit card (which may have to show the same address as the billing address), they’re paying for their digital goods on the PlayStation Store via Paypal or using PSN top-up cards.

Note: This PSN tax avoidance method is illegal and certainly not recommended.

 

  • Sony Stinks

    It’s actually PSN’s collection of taxes on transactions that fall under “Interstate Commerce” that is illegal. Based on the number of times readers were ‘warned’ about the legality of such avoidance measures, it’s blatantly obvious what the motivation behind the warnings really is:

    –EVERYONE SHOULD REMEMBER THAT PLAYSTATION KEEPS THE TAX MONEY IT COLLECTS FOR A TIME. They can therefore use it to generate interest, invest it on the stock market, use it as bridging funds or stop-gap funding….anything they want, as long as the states get their taxes at the required time.

    You wanna know how else I know this little tax game isn’t legal? PSN has ZERO business presence, offices, sales floors, or officially-licensed retailers in my state. NONE. If they don’t do business here, just exactly how can they justify charging ME tax?

    AND FINALLY–the largest piece of evidence ANYWHERE–PSN IS CHARGING A-L-L PLAYERS AT THE SAME TAX RATE. If you’re being charged, you’re being charged the same for your purchases as I am–whether your state’s sales tax is higher, lower, or even nonexistant (i.e. Guam, started a 2% tax this Oct 1). So just WHICH state is actually getting all this tax money? Drumroll, please…..

    It’s California, of course–the ONLY state that Sony Interactive Entertainment (SIE), Inc. actually has ANY sort of business presence in. What does that mean for all the rest of us? It means our states are LOSING SALES TAX MONEY TO CALIFORNIA. By the way, did you believe that SIE was actually disbursing all that tax money out the various states in the US? WRONG. They ONLY pay CALIFORNIA the taxes–meaning SONY AND CALIFORNIA ARE DEFRAUDING OUR STATE GOVERNMENTS!

    I want everyone to know that Mr. Sayers’s article here is a complete and total piece of lying GARBAGE.

    • Andrew Bowman

      Just a whole bunch of stupid.

      First, the questions:

      What’s the rate that “everyone” is supposedly paying?

      What evidence do you have that Sony is delivering all of the sales tax they collect from US clients to the state of California?

      Now the facts:

      EVERYONE who collects sales tax sits on it until tax time, then pays their taxes. That’s how sales tax works. You’d be INSANE not to invest that money while it’s just sitting in your wallet.

      It is true that the US Constitution grants the federal government sole jurisdiction to tax interstate commerce. However: several states have started charging what’s called a “use tax.” For example: in the state of New York, if you purchase an item from a retailer in a state that DOES NOT charge sales tax, that purchase is subject to the NYS “use tax.” So the consumer never pays sales tax in two different states but neither can they (legally) avoid it altogether. And the state gets around the prohibition against charging a “sales tax” by naming it something different. Technically, they’re not taxing my purchase of the item, their taxing my usage of it, which absolutely occurs within New York State and therefore is not a tax on interstate commerce.

      If this ever came before the Supreme Court, they would rule that a tax charged at the point of sale, calculated solely on the purchase price and not any “real value,” and excluding purchases on which another state has already charged a sales tax or similar use tax is a de facto sales tax. That is its intent; that is its purpose; that is what it does; that is therefore what it is. Calling it a “use tax” does not change the fact that it is in reality a sales tax.

      Sony is obeying the law of the states in which they have service contracts with their consumers, which may or may not ever be challenged in a federal court.

      If Sony is delivering all of this tax revenue to California, that is certainly cause for concern. Given your utter lack of understanding on this issue, I suspect either you’re mistaken or it’s not what you think.

      Finally: Sony DOES do business in your state. They sell things directly to you, the consumer, through their online store. They provide services directly to you, through no intermediary. Sony has service contracts with consumers in every state in the union. They absolutely do business in your state.

      • Sony Stinks

        All that may be well and good, but when you live in a state that does NOT charge such taxes, AND when you live in a state that DOES but charges a rate OTHER than 8.25%, PSN still charges you an 8.25% “tax”. You can also check into SIE’s public tax reports in California and see that they actually ARE sending all that money to the State of California and NOT to the individual states in which we live. There is also the “small” matter of PSN NOT charging taxes on certain items from US-based publishers, but still charging those taxes on foreign publishers such as Digital Extremes (Canada). This falls into the realm of a tariff, which should only be mandated federally, and in this case isn’t mandated AT ALL.
        So cut the crap. Clearly if they’re trying to obey the law, they’re doing it wrong and they SHOULD know it.

        • Andrew Bowman

          Someone can’t live in a state that both does and does not charge a sales tax. WTF are you trying to say? You seem to be contradicting yourself but I might be misunderstanding. Given that you’re using colloquialisms just because they sound good and not because they actually mean anything, that’s not surprising.

          Anyway. First you seem to indicate that Sony charges 8.25% across the board on every purchase made in the US. Later, you say they only put that tax on items purchased from non-US publishers. I’m confused.

          I mean it doesn’t matter; you’re wrong either way.

          I live in Maine. The sales tax in Maine is 5.5%. I recently made a purchase on PSN. The subtotal (before tax) was $52.96. I bought “Murdered: Soul Survivor (Square Enix),” “Thief (Square Enix),” “Dark Souls 2 (Bandai Namco)” and “Dark Souls 3 (Bandai Namco).” The tax amount was $2.91. That works out to 5.4947129909365558912%. That means they charged me a penny less than they could have. Damn decent of them to round down instead of up.

          While it’s true that all of those games were released by Japanese publishers, the fact that your claim of “they charge everyone 8.25% sales tax” is patently bullshit leaves no reason to believe that your claims of “they only charge tax on non-US publishers” and “they send all the taxes they collect in the US to California” are anything more.

          But by all means: if you have some EVIDENCE to back up those claims, do share it. I’d be terribly interested to see the data that convinced you that this is all true (it’s not, but I’d still be very interested to see your evidence).