Sales tax on digital orders?

After 30 days of using the trial version I’ve decided to buy it.

Rather than bother tech support with what may be a dumb question, can anyone tell me why they are collecting sales tax on the order? In Florida digital products (like downloadable software) are not, as far as I can tell, taxable. Also, unless Steinberg does over $100,000 of sales in the state of Florida, at their own business, not through re-sellers, they are not required to collect sales tax on online orders.

Just says $100k worth of business “online”. Also says “retailer”; doesn’t say anything about what they sell. My guess is Steinberg wouldn’t collect a sales tax were they not legally obligated.

$100,000 in sales directly from them, not resellers, is still only 167 new licenses, or some combination of a lower number of new licenses and a higher number of upgrades and crossgrades. I am sure it is easier to collect sales tax now and refund it later if the business did not meet the threshold than it is to collect it later were it not originally assessed and their sales were higher.

IIRC In the U.S., sales tax is applied by the individual state, not by the Federal government or the manufacturer. The sales agent is required to collect it for the state.

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That’s right. There is no federal sales tax. And if Steinberg itself is the sales agent, it’s required to collect the state sales tax, even for a digital product.

I suspect if there were any legal challenges to this arrangement, they were defeated some time ago.

Probably any online business is regarded as “doing business in the state” if it sells things to people making purchases in that state. Collecting taxes from online sales would be a legal and bureaucratic nightmare otherwise.

According to the Florida Department of Revenue website in a tutorial for businesses specifically addressing the remote sales (online sales) changes that happened July 1, 2021 it says that remote sales refer to tangible property. Digital downloads are not tangible property. As far as I can find - and the Florida Dept of Revenue site, while not bad, doesn’t appear to have a list of everything that is exempt from taxes. I’ll have to dig deeper to find it.

After reading the replies I remembered that when I bought from Native Instruments and Sonokinetic and Intuit (Turbo Tax) I did not pay any sales tax for those digital downloads. (And those purchases were after July 1, 2021).

James, unless you’re a very talented lawyer, good luck with your quest not to pay sales taxes for digital downloads. My guess is, given precedents, any case of yours would get shot down in court. Apparently, the state of Florida doesn’t interpret the law the way you do, else Steinberg wouldn’t feel compelled to fork over a sales tax.

Software becomes tangible as soon as you store it on a piece of hardware.

Why would Steinberg boost the price of their products x% to Florida customers unless they felt like they had no choice? My guess is Steinberg’s accountants and lawyers are one up on the rest of us.

Given that no other company I’ve bought digital products from since July 2021 has charged me sales tax I think Steinberg (or more correctly, the company that processed my payment for Steinberg) may be in the wrong.

From the online Florida Statues:
212.0596 Taxation of remote sales.—

(1) As used in this chapter, the term:

(a) “Remote sale” means a retail sale of tangible personal property ordered by mail, telephone, the Internet, or other means of communication from a person who receives the order outside of this state and transports the property or causes the property to be transported from any jurisdiction, including this state, to a location in this state. For purposes of this paragraph, tangible personal property delivered to a location within this state is presumed to be used, consumed, distributed, or stored to be used or consumed in this state.

There is no way that definition applies to digital downloads. All I’m saying is that I’ve never paid sales tax on digital sales even after Florida enacted sales tax on remote sales.

My guess is that it is easier for them to charge the sales tax to be on the safe side and hope nobody notices or complains. Besides, it wasn’t Steinberg that processed my order, it was a third party - living-C eCommerce. They charged the sales tax.

I’m not trying to fight the charge just questioning whether it is right. Given past experience since the new law went into affect, I’m 99% sure that it is wrong. 7% may not be that much to some people, but I sure could use it.

@JAMES_GILBERT, Regardless whether you are right or wrong, arguing the point on this forum will not get you any refunds.


One must also remember that Steinberg uses a payment processor, which is a financial company whose whole raison d’être is to facilitate online transactions for other vendors.

I find it highly unlikely that these payment processing companies are screwing this up. It is their speciality and expertise.