GoDaddy now charging sales tax?

[werty]

I noticed that on my last domain auction purchase, godaddy charged sales tax. I hadn't seen this before nor heard anything about this coming. Anybody else noticed or knew about this?

 

[KevinM]

I have been with GoDaddy for over 8 years now. I register about 20 domains per month for my customers, mainly .com domains.

I live in Ireland. When I am on checkout on GoDaddy, I have never ever been charged any taxes. Last month, I have signed up for GoDaddys domain club at a price of $120/year to get a bigger discount on my domains. Usually I pay $9.92 for a .com domain, and with the domain club membership, I am paying $8.29.

I registered about 30 domains last month again, and the new price of $8.29 was applied, every single time, still no taxes.

Last week I registered new domains again, and I suddenly see the price was $10.49. I logged in and out of my account, thinking there might be an error. Nothing changed. I contacted GoDaddy support and they were asking if I did consider the taxes. I went to the checkout page, and indeed, it's now taxing me 23%, which is Irelands VAT. I told the support this is strange, because over the past 8 years I was never charged any tax. Their support replied I should contact my government about the taxes, and they can't change the tax rate (obviously!).

So I accepted the fact that GoDaddy is now suddenly charging taxes.

A few days later however, I noticed when my Wife register a .com domain, she wasn't charged any taxes. Her GoDaddy account has the exact same address as mine, except she isn't in the GoDaddy domain club. My Wife has since then register another 10 domains, all without paying taxes.

She is paying $9.92 for a .com domain and I am paying $10.49 and on top of that paid $120/year to be part of the domain club, where I should get it cheaper.

I thought this is a mistake on her account. I then contacted 7 other web developers here in Ireland, and 5 other ones across Europe and asked them if they are being charged taxes on GoDaddy. EVERY SINGLE ONE confirmed, that they are NOT being charged any taxes and NONE of them are with GoDaddy domain club.

I then created a new GoDaddy account, same name and address as my primary account, and... no taxes!

I have contacted GoDaddy support 5 times now, and told them exactly what I wrote here, and all they keep saying is that GoDaddy is not in charge of taxes, and if I don't agree with the tax rate, I should call my government. They say GoDaddy must comply with each countries tax rate as seen and GoDaddy has and always will charge taxes... which is complete and utter BS, considering I have never been charges taxes on domains in 8 years, and I have proof that they don't charge anyone else any taxes in my country and other EU country, and even creating a new account shows that there are no taxes being added.

What I find incredibly strange is, that the exact same month that I sing up for GoDaddy domain club, I am being charged taxes for every domain, which in the end made it more expensive to purchase any domains.

Does anyone else have a similar issue?

 

[Isac]

These domain marketplaces don't leave any chance to sucks our blood

 

[zeff]

You must have already asked Godaddy but their godaddy domain club offer page, it is written "Prices include applicable taxes and ICANN fees." (https://ie.godaddy.com/domains/discount-domains.aspx)
So yes it looks strange that Godaddy charges you with another tax.

In another hand (and as far as i know) Ireland follows the VAT rules on registrations and returns of the EEC so there is VAT in everything you buy. Maybe you're just Lucky for not being VAT applied for the last 8 years ?

 

[garptrader]

I have dealt with sales tax compliance in consultation with the tax department in one of my assignments. However, I am not an expert in this issue - just limited experience. A product the company was purchasing was being charged sales tax by the vendor. Because the company was reselling the item they were able to make a claim of tax exemption. However, they had to provide sales tax exemption certificates in each state they did business in and then file a refund claim in each state where they had already paid sales tax. Going forward (once the vendor had the sales tax exemption certificates) the vendor was to no longer apply sales tax on purchases of the products which were being resold.

As it applies to domains, could domainers make the argument we also have the intent to resell the domain being purchased (that is the nature of the business) - thus making us exempt from sales tax? Of course the administrative cost of providing a sales tax exemption certificate in any state we might potentially find a buyer would likely be cost prohibitive. Another challenge might be is that with 1% turnover 99% of the time we do not sell what we purchase to another buyer in the same year. Regardless, there may be an argument of intent. Perhaps for those of us living in the US what we might need to do is provide a sales tax exemption certificate for the state we live in. The other issue though would be that with the exemption certificate, the domainer would then be responsible for charging sales tax to its customers and remitting that tax to the appropriate taxing authority. I am not an expert in this matter.

This might be worth further research.