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Entries in Sales Tax (1)

Friday
Apr092010

Another Flaw in the eBook Agency Model

Some major book publishers (HarperCollins, Simon & Schuster) have opted for Amazon's "Agency Model" to sell their eBooks. Simply put, this means that the publisher sets the price and Amazon sells then delivers it at that price.

However, it also means that Amazon is not the seller anymore, and they've gone through the trouble to let you know that they have no control over the pricing of a particular title.

This also has tax implications. 

Amazon is very careful about where it keeps distribution centers and any other physical presences in the United States. That's partly because once the company has a physical presence in a state, they have to collect state sales tax.

However, since Amazon is not the seller of the eBook I recently purchased and HarperCollins has a physical presence in the state where I live, Amazon must collect tax on their behalf.

 

So even though I may no longer be paying for shipping on a physical book, I now have to pay sales tax on it, depending on the publisher.

Thanks, HarperCollins.