Taxes at Fictionwise « Back to Help
New Jersey Sales Tax
What is the New Jersey Sales Tax on eBooks?
As of October 1, 2006, the State of New Jersey changed tax laws to make all electronically downloadable products, subscriptions, and services, including eBooks, taxable to New Jersey residents. Because Fictionwise, Inc. is a New Jersey corporation and is operating in the State of New Jersey, we must now collect this tax, which is currently 7%, for any member who lives in the State of New Jersey.
How Do you Determine Where I Live?
Because eBooks are not shipped, we use the billing address of your credit card to determine where you live and whether you are subject to this tax. If you did not use a credit card (for example you used Paypal or you sent us a check for Micropay deposit), we use the address in your Fictionwise member area to determine where you live.
Do I get charged NJ Tax both when I buy Micropay and again later when I use that Micropay to purchase eBooks?
No, sales tax is never charged twice to any funds you deposit. Sales tax is only charged at credit card transaction time (or Micropay deposit time). So, you are charged the tax when you make your Micropay deposit but not again later when you use that Micropay. This is the correct way to do it because some rebate promotions deposit money into your Micropay account, and no tax is due on purchases made with such rebates because you did not actually pay us that money. Sales tax is only due on amounts you pay to us; money has to change hands from you to us for sales tax to be incurred.
If I am a New Jersey resident and I purchase an eBook that has a 100% Micropay rebate using my credit card, do I get charged sales tax?
Yes. Again, sales tax is always charged at credit transaction time (or Micropay deposit time if using Paypal or a money order or other method of payment). You are not charged again when you use the Micropay dollars that result from the rebate, however, so you are only charged on each credit transaction once. Note that if you buy a physical item that is subject to sales tax and has a mail-in rebate you would indeed be charged by the merchant on the full retail price, so this is no different from how rebates and taxes work on physical goods.
What if I am a New Jersey resident and I deposit funds into my Micropay account via Paypal, check, or money order?
In this case we will deduct the proper amount of sales tax and deposit the remaining funds into your Micropay account.
Is Sales Tax charged for Buywise Club membership, AudioBooks, eMagazine Subscriptions, or Libwise library membership for NJ Residents?
Yes. The New Jersey sales tax additions cover a wide range of digital goods (audio, text, video, and software are all covered) as well as digital services, and it specifically says that "subscription" programs and buyer's club programs are covered by the tax. Therefore, our understanding is that Buywise Club, eMagazine subscriptions, eBooks, Audio eBooks, and Libwise library subscriptions would all clearly fall under those definitions and are subject to the NJ sales tax.
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