Recent changes have been made in reaction to the Wayfair Act that require tax collection for online
sales of digital products in more states than before. Currently sales of digital products
will not incur a sales tax for residents
in the following U.S. states and regions: Alaska, Delaware, Montana, New Hampshire, Oregon,
AA, AE, AP, AS, and Puerto Rico. Of the remaining states, some have no tax on digital goods,
while some tax computer software / video games only. If the state requires collection
of sales tax on digital goods, the sales tax will be shown on the order page after the user
enters their address information.
Regarding Sales Tax Exemption If a U.S. customer is buying on behalf of an organization that is exempt from paying state and local sales taxes, FastSpring (RazorSQL's order processor) can refund the sales tax after the purchase has been completed. At this time, there is no way to prevent the sales tax from being collected on the order initially.
Customers can email a copy of their tax exemption certificate or other supporting paperwork issued by the state government to firstname.lastname@example.org along with their order reference / order ID, and the Fastspring support team will refund the sales tax back to the original payment account.
From the time the Fastspring support team replies to a ticket with a tax refund request, it can take a few business days for the funds to post back to the customer's payment account.
Fastpring (RazorSQL's order processor) collects VAT tax for EU countries, GST tax for Australia, New Zealand,
and India, and consumption tax for Japan.
VAT and GST Exemption
Customers that are exempt from paying VAT or GST can prevent tax from being collected on their order by
providing their valid VAT ID or GST ID at the time of purchase. For those providing a valid ID,
no tax will be collected, and the ID will be included on the invoice provided upon purchase completion.
VAT / GST Refunds In case a customer neglects or is unable to enter a VAT ID or GST ID at the time of the purchase, please instruct the customer to email Fastspring at email@example.com with the order reference / ID and the valid VAT ID or GST ID. The Fastspring buyer support team will promptly issue a refund for the tax that was collected on the order, back to the original payment method.
Verifying FastSpring's Local Tax Registration
FastSpring's EU VAT Number EU826012240 Many companies have a VAT that begins with the two letter language ISO 639-1 code indicating where their company is located. FastSpring's VAT number is EU826012240. The number begins with "EU" because FastSpring is located in the United States, not in a European Union member state.
The Fastspring VAT number cannot be verified by the usual VAT validation services, but would have to be verified by the Mutual Assistance Office (a sub-department of the local VAT collection agency) in each EU country from a database available to those offices.