Why am I being charged sales tax on my purchase?

SUMMARY

This article explains the circumstances under which sales tax will be collected on orders processed through the eSellerate system.

MORE INFORMATION

eSellerate collects sales tax on certain orders placed by customers located in U.S. states where Digital River, Inc., eSellerate's parent company, has tax nexus.  In some of those states, sales tax might or might not be collected depending on the contents of the customer's shopping cart.  For U.S. orders placed by customers in states where Digital River does not have tax nexus, no sales tax will be collected.

Note for Customers in Norway:  Norway has enacted a law requiring companies such as eSellerate to collect sales tax on purchases by customers located in Norway, when the orders include electronically-downloaded products.  This tax is separate from VAT (Value Added Tax), which is collected from customers in countries that are part of the EU.

Digital River has tax nexus in the following states:

• California
• Colorado
• Georgia
• Iowa
• Illinois
• Michigan
• Minnesota
• Nebraska
• Utah

In this context, the term "tax nexus" essentially means that Digital River has offices located in (or employees who work in) those states.  Because revenue-generating business operations are conducted in those states, the states' laws require Digital River (and companies owned by Digital River, such as eSellerate) to collect sales tax for certain orders placed in those states (at each state's current tax rates).  All sales tax collected is remitted to the states' appropriate taxation authorities.

Non-Taxable Orders

Some states do not require the collection and remittance of sales tax on orders that contain only products to be delivered by electronic download.  In the following state, sales tax will not be collected on orders that include only downloadable products:

• Georgia

When a customer in this state places an order that includes at least one shippable/physical product, sales tax will be collected.  When a customer in this state places an order with no shippable items, no sales tax will be collected.