Sign up for a Free 30 Day Trial of G Suite Business and get Free Admin support from Google Certified Deployment Specialists. No Credit Card Required.
Last Friday Google sent an email to G Suite Administrators across the United States notifying them of an impending "US Sales Tax" to be charged on G Suite Apps Subscriptions beginning November 1, 2017.
The email, for those that received it, is causing confusion among businesses and Google partners alike. Over on the Google Product Forums, a Google Advisor noted there is no federal internet tax and the email was probably just poorly worded. The advisor referred the user to the same email discussing the tax topic on Google's Support Site: About U.S. sales tax
"Here in Texas, We're used to paying sales tax on products that have gone digital. We see it in our Google Play and Itunes purchases, We see it in our Hubspot and Quickbooks subscriptions. "
But who is responsible for unpaid sales tax that Google didn't collect on behalf of businesses in Austin and across Texas? That's the question we asked the Texas State Comptroller just after we received the email from Google just days before opening their new office downtown Austin, a few blocks from Coolhead Tech.
Google's Email states it will charge US Sales Tax beginning November 1, 2017.
At first glance, many G Suite Admins may have dismissed this message, with its bizarre headline about a US Sales Tax, as a phishing scam. That was our first thought but we did what any good Google admin would do with such suspect, we checked the email headers, and sure enough this email passed all of the sniff tests.
Here's a copy of the G Suite sales tax email from Google:
|subject:||US sales tax on your G Suite subscriptions|
Starting November 1, 2017 Google will start charging sales tax on your G Suite subscriptions, including subscriptions for your account coolheadtech.com. This is in compliance with US sales tax regulations.
If applicable, the sales tax rate will be determined by your billing address. We are sending this notice as a courtesy to let you know of this change in advance of the next billing cycle.
If you believe your organization qualifies for a tax exemption (for example, because of a nonprofit or government status), you can follow these instructions on how to provide your tax exemption certificate to Google for review. In anticipation of this upcoming change, please provide any certificate(s) as soon as possible in advance of November 1, 2017. Failure to do so will result in sales tax charges beginning on this date.
If you have questions or need assistance, please head over to our Help Center or contact Google Support with the reference number xxxxxxx. When you call or submit your support case, please provide this number in your call or in the subject line of your case.
The G Suite Team
Is My Business Responsible for Texas State and Local Sales Tax on our G Suite licenses for the entire period of Use before November 1, 2017?
Here's the response we received from the State of Texas Comptroller's Office:
Based on the information provided, if a vendor does not collect sales tax, you the purchaser are responsible for paying to the Comptroller’s office sales or use tax on your purchases of taxable items, see Sales Tax Rule 3.286 (b)(4), Seller's and Purchaser's Responsibilities, including Nexus, Permits, Returns and Reporting Periods, and Collection and Exemption Rules.
If you hold a sales tax permit, report the purchase as a “taxable purchase” on line 3, of your sales tax report, see Form 01-922, Instructions for Completing Texas Sales and Use Tax Return.
If you do not have a sales tax permit, report your purchase on Form 01-156, Texas Use Tax Return.
The Comptroller’s Texas Taxes webpage has additional tax information, including rules, statutes, publications, and frequently asked questions at comptroller.texas.gov/taxes/a-to-z.php.
We hope this information is helpful. Please email us and reference the general information letter number indicated above if you have any questions about our response at comptroller.texas.gov/web-forms/tax-help/.
Our goal is to provide you with prompt, professional service. Please take a moment to complete our online survey.
Texas Comptroller of Public Accounts
Here's Google's Response to the same question (and The State of Texas Comptroller's Office's response) about Sales Tax prior to November 1, 2017.
Thank you for contacting Google Cloud support. I understand that you want to know, who'll be responsible for any sales taxes prior to November. I'm at your disposal from 4:30pm-11:00pm your time, Monday through Friday. Please let us know if you have a prefer number and time to call, and we'll be happy to contact you then.
We apologize for the delay on replying to your ticket, but due to the high volume of cases on queue, and the weekend, it was not possible to contact you sooner. I just got this case assigned. Taxes that were not placed prior to November 2017, won't be charged to you in a later future, as this is not retroactive. I wish I cold provide you with more information, but unfortunately Googlecan’t advise on tax matters. For this, please reach out to your local tax advisor, as from stat to state the laws change. If you'll like to know more about G Suite, and the taxes, please feel free to visit this article 'https://support.google.com/a/
This case will remain open for 3 business days, while we wait for your reply. If you have any other questions, don’t hesitate to reply. After it closes, you can still reply within the following 30 days, and I’ll be more than happy to assist.
Google Cloud Support
What Do You Think? Who's Responsible for Prior Unpaid Sales Tax on G Suite Licenses?
Google started charging for what was then called Google Apps Premier Edition in February of 2007. By June, 2014 Google Launched Google Apps Unlimited, offering two price choices for what's now G Suite Basic and Business, priced at $5/user/month and $10/user/month respectively.
Do you buy G Suite from a Reseller with an office in Texas or Google Directly? Have you been charged sales tax up to now? Who Should pay the back sales tax?