Tier fees increased by tax

People are probably more upset that there was no warning about this. Everyone already knows that taxes are apart of life.

That would be difficult for them, unless they charge the sales tax rate of California? We pay 6% sales tax in PA, but food is excluded unless it's "prepared" food. But I could drive an hour into Delaware and pay no sales tax at all, which we sometimes do. My RL workplace charges tax based on where the product is shipping. If it's shipping to Delaware, our system is configured not to charge sales tax on the order, it also configures which states charge sales tax on freight (shipping costs) since some do...some don't. I wonder if they woudl charge Americans tax based on state lived in since that is where the "service" is going, or based on LL location.
It's true that European countries pay more in taxes than we do in America....but they also have national health care systems that we don't have, so I think it actually evens out as far as that goes.
Either way...it stinks that LL applied this tax with no warning. This isn't going to end well, me thinks.

Well. for me at least ,another nail, definitely was knocked in the coffin.. another 4 uk pounds a month for an empty quarter sim.. some value added?.. i think not.. being taxed just to be here in a space that is mine to use.. Well Gordon Brown.. what can i say.. your method and reasoning stinks.. lets stifle ingenuity.. lets compromise innovation...lets tax it...

maybe , and the balance teeters now.. its time to let go.. 3D or not 3D... 2D is still free...its looking attractive now again.

In the US, internet specific taxes are prohibited by the Internet Nondiscrimination Act. But that act is set to expire Nov. 1 and is currently going to the renewal process. (keeping my fingers crossed and writing my congress critters)

Mad because it appeared with no warning and no announcement. So it says that LL is either very disorganized, or that they wanted to take every Euro they could off of VAT-paying residents so they were sneaky about it.

Well - here's the future for the US SL residents:

http://www.ferndale-mi.com/Government/sl_sales.pdf

Add this to your bill.......

Alabama - 11 per cent
Arizona - 10 per cent
California - 9 per cent

etc
etc
etc

Mainly because over here increasing a prior agreed subscription fee without written prior notice *for whatever reason* is illegal. (and by written notice that is an e-mail or letter, not a blog post).

Matthew

Even so, as a Californian, I still have a huge competitive advantage over European residents now. And those in states with no tax have a huge advantage over me.

I'm sick to my stomach. This is the biggest news to hit the SL economy since I've been here. Although I can't really call it news because no announcement was made.

If I'm being charged a fee without VAT included, it states that Chris. When I get a quote at work for an item, it says "VAT Not included", I believe this is a legal requirement.

It's not the being charged the tax that's the issue, VAT isn't a new tax, it's not something we're not used to paying, it's the slapping it on your billing page without announcement.

Oh the irony. Linden Lab moves its bank accounts to the UK to escape the clutches of the US Internal Revenue Service for potential liability for unreported income by U.S. resident customers and now finds itself in the clutches of the EU if it does not comply with VAT tax collection requirements. Brilliant! Genius! *golf claps*

I wonder if we could turn this around by claiming that we're not paying for a "product" but a "service" as LL constantly claims?

Either way, condolences to our EU Brethren!

And either way, LL SHOULD have made a gracious announcement on the blog, rather than just sticking it in our ears. Ooooh no, instead we get to read about Mechinima and Wiki? Where's Ostrich Linden? Don't they think that THIS will affect a much larger portion of their population than a post about movies, and deserves to be treated as such?

Truly shameful.

Ah, but the FEE wasn't increased. If it was, all of us would be paying it, not just EU users.

Now, I won't argue that it wouldn't have been considerate to give a heads up, but really, in this case, do you think LL could honestly change the laws of the EU and/or avoid the tax? Oh, well, I suppose they could refuse to allow European players to access.. that's one legal way of avoiding the taxes.

Although, I can honestly see why they didn't, given that they get plenty of grief over things that they do have control over....

Sorry if this sounds so harsh, but this is not something LL has any real control over. This is a government issue and while I sympathize, I'm not an EU user, therefore, I have no say in any government over there. Besides, I'm plenty ticked off at my own government at the moment

People over here buy stuff over the internet from the USA all the time Chris. Those goods are not subject to VAT, but the tax laws of those states.

Europeans are not suffering these price hikes due to any change in government policy, but because Linden Lab decided to fart about with their payment processing situation (move it to a country outside the US) without considering the taxation implications.

...and to rub salt into the wounds, they let us find out by accident.

I'm guessing Zee Linden is still the Chancellor of the Exchequor over there. The lack of forethought or diplomacy is a giveaway.

17.5%!!!!!


OMG

*feints*

Hang on - since LL is based in California, shoudn't the Europeans get 9 per cent deducted from their tier fees before the EU levy is applied?

Where is all of the rest of the money going?

Oh, and this hits EVERYONE wherever you are based - this will make the casino and the ageplay furores look like a square dance !

Sony's "Home" is being introduced early next year (delayed from Q3 2007 cos they want to make it perfect), that will be a one-off 50 USD cost..... and will come just at the time that tier fees are due to go up in feb 2008..... OMG !

They should announce that prices do not include VAT and what are we paying VAT on? If I buy Lindens, will I now be charged VAT on those purchases too? No explanation here at all and advertising without stating that VAT is not included could well get LL in trouble.

They should just charge you 10% more for a few months to cover the cost of moving the billing back somewhere where the taxes are sane !

The thing is, when Ebay had to start adding VAT onto items sold by EU based sellers, it didn't matter where in the world the buyer was located. They had to pay it.

You guys in America wanna start praying that another Linden oversight hasn't occurred here because if your payments are being processed in the EU as well, well I don't see why you shouldn't be paying our extortionate rates too.

The monthly price I agreed to pay has increased.

When I agree to pay $50 a month - I agree to pay $50 a month, no more, no less. Any tax must be subtracted from that. If an additional tax is suddenly applicable, my agreement to pay $50 a month is unchanged, and the additional tax must be subtracted from that $50 until an agreement to pay a different amount is agreed (e.g. by giving prior notice).

At least that is how things work in the UK.

Matthew

Ok Mr. Walker, that right there is just about all the nonsense I can take!

Shhhh! jk lol

*grins wryly* Yeahhh, I'm expecting to soon enough, actually. I mean, LL definitely doesn't consider all the possible angles on a situation before acting. Their track record in the forethought department is abysmal at best and they did have the stupidity in moving their bank overseas... *sighs* We'll see what happens. Maybe someone in their financial department will get a clue stick taken to their heads and they'll pull the banking back over to the US.

If they start charging us in the US 17.5 percent it will be moved back fast.

thats almost as bad as out Hotel Tax rate.

We dont pay that for normal items. Sales tax is only 6% where I live.

To hit customers with an increase laike that unannounced, for any reson is just a bad business practice. There is no excuse for it. It just shows either incompetence or contempt.

If I was an EU resident, I'd be pissed off too. 17.5% is no small amount.

However, I agree with others that the ire seems a bit misplaced here. Linden hasn't raised any subscription fees - they're compling with local laws, where previously, they weren't.

If I suddenly started getting hit with 6% Michigan sales tax for my Second Life account fees, I'd be disappointed - but I'd find it difficult to blame LL for compliance. If anything, my prior 3-years here becomes a tax-free bonus.

Technically, its *my* responsibility to claim any uncollected sales tax for my state, since I dont live in California - not LL. That's the way the law works in Michigan at least - I think its very similar in other states. If you dont live in the state the purchase is made in, taxes are collected on the honor system.

The sentiment I *do* agree with here, is on communication. Informing customers about a change like this is just the right thing to do. I can see where they might not want to do it with a blog post, because talk about a VAT tax would likely cause confusion & fear among the non-EU folks.

However, I think it would have done a lot of good to send out a targeted email to EU subscribers that, effective X date, Linden Lab will be conforming to EU Tax regulations. Of course, folks would have still complained just as vehemently anyway.

ya this DID happen because they outsourced billing to the UK..if it stayed in the US the europeans wouldnt be getting hit...
yes corp LL ARE dumb as hell lol
but I love ego in an enemy it greatest weakness mankind has lol