I'm starting to feel like I'm a criminal

[binaryman]

I have been steering clear of TM issues by only regging NON TRADEMARKED names in GENERAL catagories and making sure that no-one owns a trademark on the name. But now I just read this and it seems we as domainers are "rubbish" whichever way you look at it.

"You don't "buy" a domain name. You register it. Why do I say this? No matter how many domain names are registered, the price stays the same. So you, the cyber-squatter, pay $25 or whatever to register the domain, then you take a payoff from someone else to transfer it to them. Basically, you are taking advantage of a monopoly, ICANN, to make a few bucks. **** off and die. You are providing no service to anyone, and you expect to get paid for it.

The whole reason people have been fooled into believing cyber-squatting is OK is that improper language including terms such as "buying" and "selling" have been used to describe it. I implore the press to start using proper terminology such as "registration" and "payoff" to refer to these acts when they are applied to registering domain names and transferring them in exchange for money.

I really don't care about the distinction others make between "cyber-squatting" and "domain name speculation." It's all the same to me, except that one is illegal under US law. Doesn't anyone care about ethics any more?
Solutions

I'd be just whining if I didn't offer a solution. The simplest solution would be to remove the artificial limits on the size of the top-level namespace, allowing any random string of characters to be used, except perhaps reserved ones for countries, etc. Then .com domain names would cease to be so sought-after. Another solution would be something similar to my proposal for a cooperative DNS infrastructure.

Cyber-squatting is a symptom of problems in the very structure of the Internet, one that warrants a technological and social solution, not a legal one."
Sean R. Lynch

 

[armstrong]

The only reason many domain sales are not taxed is because they are not monitored, since most sales are conducted at the personal level. Like other consumer items (jewelry, baseball cards, antiques, paintings), capital gains taxes will accrue only if the transaction is reported. While it may be legally required to report all your personal profits (or not, depending on where you live), many transactions at this level - whether for domains or jewelry or whatever - are not.

Still, the issue of taxes is irrelevant to whether something is property or not.

 

[labrocca]

Something doesn't have to be tangible DNQ for it to be taxed. Utility services are taxed, services like automobile repair services, heck even 'airport taxes' just for buying a ticket.

Still, the issue of taxes is irrelevant to whether something is property or not.

EXACTLY

 

[DNQuest.com]

That is the point I am trying to make, I guess I'm not presenting properly. As long as we stay under the radar of the government, they will leave us alone (hopefully). We all know utilities, we all know car repair, not everyone knows about domains and I want to keep it that way. So if people keep pushing for domains to be real property (or the perception of real property), someone may tax notice that a huge sale was not taxed, that's all I'm trying to say.

As far as capital gains, if I sell my car for more than I bought it, I have to pay gains on it and the person has to pay taxes on the purchase (double taxation), I don't want that for domains.

 

[primacomputer]

Prima, there are ways to to but items without taxes.. froma neighbor, craisgslist, auction, street corner, flea market, etc... but if you buy it from a store, you are going to pay taxes on it, or at least the person who bought it paid taxes on it.

This is simply not true. I bought my TV from a store and I did not pay tax on it. The store I bought it from did not pay any taxes on it. The company that imported the TV and sold it to the store didn't pay any taxes on it. Heck, the factory that made it probably didn't even pay any taxes on it because it was for export.

As far as the active imagination about taxes, there are very few things in life that are not taxed, I pay tax on food, utilities, furniture, candy, drinks, gas, vehicles, property, etc (please keep in mind, some items are sold with tax INCLUDED in the price).

Thanks for sharing, although I don't see the relevance. I don't pay any tax on food, utilities, furniture and plenty of other things. But it's always reassuring to hear that I'm getting a better deal than someone else

What makes you think at some point, the government sees a million dollar sale from a domain and they get no piece of the action, they say it is property and needs to be taxed. Eventually, it could come up.

Nothing makes me say that. In fact I didn't say it.
All I have said is that not all property is taxed and not all things with are not property are untaxed. That's my whole point. The issue of whether a name is considered “property” is largely irrelevant as to whether it is taxed or not.

If some government wants to try to tax domain names they're welcome to it. They won't even have to classify names a “property”, just make a law saying you have to pay tax. But it won't affect me in the slightest because I will simply see to it that transactions are done in one of the myriad of other jurisdictions that don't have such silly laws.

In the US, we are tax happy, please keep that in mind (where is the is the central registry located?)

(Nowhere)
There is no “central registry”. There's a collection of root servers located in many places around the world which provide pointers to the root servers for all the TLDs.

As for being “tax happy” you might want to read up on the law. It's been largely illegal to tax the Internet since 1998.

I see domains as intellectual property, and we have limit use of that property when we register the domain. Notice we register and not buy domains.

Oh. So they are property after all? Glad we finally got that sorted out

 

[Badger]

well, i dunno about the US but in the UK (and i must concur with DNQ) you pay value added tax on everything you buy (with certain exceptions noted above like food, clothing etc).. The only person however to actually pay the tax is the consumer, for every other link in the purchasing chain, from manufacturer to re-seller, claims back the tax..

Now, to use examples as given, you buy a TV from a store, you pay tax - this may not be shown on the sales receipt, but trust me, YOU PAY TAX...

Now the point about the internet and tax is very complex and very difficult to police [im sure here Prima can call on his domain police]. However, you buy and sell domains, you get paid from foreign sources, whatever country you are in (and if you are unlucky to receive a tax audit) the evidence against you (if you choose to declare the income showing in your bank account as repayment of a loan (or other such ficticious story)) is very hard to prove to the contrary..

I read an article recently by the UK inland revenue that billions per year are being lost in tax through the likes of ebay sales etc and the seller being untraceable... Now this has been going on for years, you wash someones car as a kid, you babysit for someone, you hold a garage sale etc etc - these are all incomes which should be taxable - but who declares them...? No-one, thats who... The internet has changed this, its now big business and billions are being wiped from the central coffers as a result... Im sure they will get round to putting pressure on bodies such as sedo etc in due course but their problem is and always will be the fact that you are dealing with just so many different countries and jurisdictions - at the mo, its nigh on impossible...

Thankfully :red:

 

[labrocca]

primacomputer where are you from because it's most likely not the USA...and DNQ...if you buy a domain for $8 and sell it for $500 then you are suppose to be paying tax on that..I ain't judging you if you don't just saying that under the current laws income is income no matter WHERE it's from.


Also DNQ I get your point now...saying that if domains are viewed as property that taxing it will surely follow...and I agree 100%.

 

[primacomputer]

primacomputer where are you from because it's most likely not the USA.

I'm from the US. That's just not where I live, and not where I bought my TV
But it could have been. I can ring up a shop in the US and ask them to send me a TV. They'll ask me if I'm in the same state as they are and they'll happily charge me zero sales tax if I'm not. Or I could travel to Europe to buy my TV in and simply hand in the receipts to customs when I leave and receive a refund of my VAT. Or I could just live in a place that chooses not to put local businesses at a disadvantage by taxing their sales and shop locally.

So much property, so few taxes. This unbreakable “link” between “property” and tax simply does not exist. How clear or self evident such a link might be to to anyone is irrelevant.

As a business I buy and sell tangible property, intangible property, services and domain names all the time. For tax purposes they are all treated the same. I don't pay a cent in tax on any of them. I pay tax on any profit I make which is subject to profits tax in the appropriate jurisdictions; on services, tangible property or anything else I trade.

 

[DNQuest.com]

I have nothing new to really add, but if I remember correctly, there was a bill proposed in hte US to start taxing internet sales. It was shot down for now, but as the internet grows more, it will be revisited.

"if you buy a domain for $8 and sell it for $500 then you are suppose to be paying tax on that..I ain't judging you if you don't just saying that under the current laws income is income no matter WHERE it's from."

I'm not quite following this, I buy and sell through my business, so all sales are revenue and I am taxed on profits at the end of the year. If you don't have a business, you should be claiming capital gains.

 

[primacomputer]

If you bought and sold intangible property or services as part of your business would you still pay tax on the profits?

 

[mcaricofe]

If you bought and sold intangible property or services as part of your business would you still pay tax on the profits?

In the USA, a business has to pay taxes on any profit. How "profit" is figured is a vastly complicated procedure, but yes, taxes must be paid on profits.

 

[labrocca]

profit is not 'vastly complicated...

Income - Expenses = Profit

Now measuring all your 'expenses' and 'income' can be as simple or complex as you want it. There are many different accounting methods which can be used.

 

[DNQuest.com]

If you bought and sold intangible property or services as part of your business would you still pay tax on the profits?

Seriously?

 

[binaryman]

Here is the British angle on Domainnames and taxes-interesting read.
http://www.vnunet.com/accountancyage/news/2022452/uk-lifts-tax-threat-domain-names

 

[primacomputer]

In the USA, a business has to pay taxes on any profit.

Exactly, and the same goes for basically every other jurisdiction in the world.

As far as I'm concerned this is pretty straight forward but there's this domainers urban legend that says that if domains are considered “property” we will have to pay “tax” on them. Profit tax was brought up as one potential tax on domains. But as you have correctly observed, whether something is property or a service is irrelevant to whether it's subject to profit tax.

 

[mcaricofe]

In the USA, a business has to pay taxes on any profit.

Exactly, and the same goes for basically every other jurisdiction in the world.

As far as I'm concerned this is pretty straight forward but there's this domainers urban legend that says that if domains are considered “property” we will have to pay “tax” on them. Profit tax was brought up as one potential tax on domains. But as you have correctly observed, whether something is property or a service is irrelevant to whether it's subject to profit tax.

And yet, last night you posted

If you bought and sold intangible property or services as part of your business would you still pay tax on the profits?

So, which is it? Is it "straightforward" or do you have any idea what you're actually asking?

 

[Badger]

Ahhh, hold on one gad darn minute there folks..... It appears two issues are to the fore and being argued against in the old oranges Vs apples debate...

No VAT (sales tax) is payable on foreign/across country/state whatever sales (prima is correct). As an individual however, You WILL be liable for capital gains tax on the profit you make from selling anything.. And depending upon your circumstances and or country of residence this can be some serious bucks and also irrelevant when the person you sold said item to lives in Kuala Lumpar...

"Value added Tax" and "Capital gains tax" - Two completely different beasts - Though both designed to fleece the maximum amount of your money from you...

 

[primacomputer]

And yet, last night you posted
So, which is it? Is it "straightforward" or do you have any idea what you're actually asking?

It's really very straight forward. I was simply asking someone who claimed that domain names would be taxed if they were considered property whether this particular tax would be levied for things that were intangible property or services.

I'm trying to get people to think critically and question things they simply believe without knowing why. I'm doing this by asking a question that I know the answer to but which points out holes in their logic.

 

[DNQuest.com]

Prima, I don't you are understanding my point with taxes. We all know aobut taxing profits and capital gains. My point is, what if domains are treated like real property and the government says, hey, all property is subject to a sales tax.. this would be paid by the buyer, nopt the seller, but the seller still has to pay the appropriate tax on profits, that is my point.

 

[primacomputer]

I understand what you're saying. I'm just pointing out how it doesn't work that way.

Sales tax is not some unified tax, and certainly not international. Each state levies different taxes on different things. Some states tax one item, others do not. As a general sales/ value added/ good and services tax is not collected when you buy from another state/jurisdiction.

Many states collect sales tax on services. Domains are currently considered a service. This is by contract and by law to some degree—regardless of what any forum members (including myself) think they should be considered to be. There is nothing (aside from perhaps the Internet Tax Moratorium) stopping any state from collecting sales tax on domain names or any other service.

Sales tax is generally not levied on real property. There are separate taxes for that. If domain names were considered real property there would almost certainly be no sales tax on them.

In short, domains will not automatically be subject to sales tax if they are considered property, nor will they be permanently safe from sales tax if they continue to be considered a service.

There are plenty of valid tax issues that do come up depending on how names are classified. It's a shame we're getting hung up on this sales tax thing which is a non-issue.

 

[cache]

property can be owned in terms of time shared. Also in china, the ownership of a property is only 70 years. Even if you own one year, it is still a property.