13% Tax in Florida?

[JohnA]

Thank you for your posting. We recently identified an error in our system which went into effect at the beginning of November, where incorrect tax amounts were added to movie or TV purchases (not rentals) made in the states of Florida and Kentucky. We are working to remedy the error, which should be reflected in future purchases made in the coming days. (Note that the tax for rentals is correct; this only applies to purchases.) For our customers in Florida and Kentucky, who have made a purchase in which you were charged an incorrect tax amount, we plan to provide you a credit for your Vudu account within the next few weeks. We are sorry for any inconvenience this may have caused you and we hope we can continue to earn your business.

[tbdave]

I received more info from the Florida Department of Revenue:

Yes, the department is reaching out to VUDU to discuss and educate them on the issue. However Florida’s Confidentially laws limit what the department can disclose about a business, a case, or actions taken. Tax information is confidential under Florida law (section 213.053, Florida Statutes).

Hopefully the Florida Department of Revenue will be able to contact the right people and clear this up.

[jeremymc7]

Like I speculated it was CST be it applied incorrectly.

Thanks I'm not in Florida.

[tbdave]

I contacted the Florida Department of Revenue. Here's the response I got:

It appears VUDU.com maybe assessing a Florida Communications Services Tax.

Per the information provided you are “purchasing” digital media.

SALES of digital video content, whether stored online or downloaded to a customer’s device, are sales of “information services”. Such sales are not the sale of a communications service and are not subject to CST. F.S. 202.11 definitions (1), (5), (24); TAA 14A19-005-nonbinding-not specific to VUDU.

RENTALof digital video content is a “video service” pursuant to Florida law. As such, charges made to customers for the rental of digital video content to a Florida service address are subject to CST on the sales price. F.S. 202.11 definitions (1), (5), (24); TAA 14A19-005-nonbinding-not specific to VUDU.

A purchaser seeking a refund of or credit for a tax collected by a dealer must submit a written request for the refund or credit to the dealer in accordance with this section.

It sounds like Vudu screwed-up and added Florida Communications Services Tax to all orders instead of just Rentals.

[trd365]

6% - Florida State Sales Tax
0-2.5% - County Sales Tax

Florida Department of Revenue does state the following:

"Communications services tax (CST) is imposed on each sale of communications services in Florida. Examples of communications services include, but are not limited to:

• Cable and satellite television,
• Video and music streaming,
• Telephone, including Voice-over-Internet Protocol (VoIP),
• Mobile communications, and similar services.

• Mobile communications and video services are taxed at the total Florida rate of 7.44%, plus applicable local tax rate. There is no residential exemption."

So it does appear that Florida is taxing streaming services now.


This might not explain everything but for you Florida people it's something to start with.

The CST doesn't apply to digital movie purchases though. However, it does apply to rentals. (Confirmed by the Florida Department of Revenue.)

Further any CST that may be applied needs to be broken down on the receipt as shown in your cable bill.

VUDU was acquired by Fandango, who is owned by Comcast.

I'm willing to bet they've been getting away with burying the CST on purchases in customers' bills for years and now think they can get away with charging a CST on all platform purchases, but they're not going to win this one.

[DARTH SILKWORMS]

The good news is they can't ignore the Florida Dept of Revenue, who has already been in touch with them regarding this clear tax violation on purchases.

Hopefully they'll have the issue resolved very soon.

Until then, I have ceased all movie purchases on VUDU, simply because it's very unlikely any taxes collected on purchase will be refunded.

I've bought 600 movies on Vudu and I will not buy another one until this is sorted out. 13.5% without any warning is just ridiculous.

[trd365]

Here's the follow-up response from Vudu Customer Support:



Seems like Vudu is ignoring the customer complaints. I guess the only thing to do is contact the Florida Department of Revenue and file a report. If you go to their website, you can file a report via email. Hopefully they'll be able to tell us if Vudu is overcharging or not.

The good news is they can't ignore the Florida Dept of Revenue, who has already been in touch with them regarding this clear tax violation on purchases.

Hopefully they'll have the issue resolved very soon.

Until then, I have ceased all movie purchases on VUDU, simply because it's very unlikely any taxes collected on purchase will be refunded.

[tbdave]

Here's the follow-up response from Vudu Customer Support:

I'm sorry for the inconvenience that this situation has brought you, but for additional information regarding the taxes collected, you may reach out to your local government for more assistance.

Seems like Vudu is ignoring the customer complaints. I guess the only thing to do is contact the Florida Department of Revenue and file a report. If you go to their website, you can file a report via email. Hopefully they'll be able to tell us if Vudu is overcharging or not.

[DARTH SILKWORMS]

I placed a pre-order months ago when Vudu was charging 0% tax in Florida. Vudu charged my card tonight and charged 13.5% tax. Sales tax where I live in 6.5%. Is this going to be fixed? This feels like fraud to over charge people like this without warning.

[avemaria]

Our sales tax isn't even 13% here in Florida..

[tbdave]

I filed a support ticket and got a response:

As of 11/1/2020 Vudu is charging taxes for digital goods in Florida. In regards to the 13% we are still looking into it since we haven't had any updates for this information as of yet.

Adding tax is unfortunate, but understandable. However, the 13% charge is ridiculous. That's double the normal tax rate in Florida. Vudu needs to explain why Florida customers are being overcharged.

I'm also curious why other streaming companies aren't charging tax in Florida. I purchased a movie at FandangoNow last night (instead of at Vudu), and I wasn't charged any tax. They're both owned by the same company. So why is Vudu charging tax and FN isn't?

[Kotor29]

I am having this problem as well. If sales tax is added it should not be 13%. If just tried to make a purchase and the sales taxes charged is 13%. That is a mistake because sales tax is between 6 and 8.5%, depending on the county.

[jeremymc7]

6% - Florida State Sales Tax
0-2.5% - County Sales Tax

Florida Department of Revenue does state the following:

"Communications services tax (CST) is imposed on each sale of communications services in Florida. Examples of communications services include, but are not limited to:

• Cable and satellite television,
• Video and music streaming,
• Telephone, including Voice-over-Internet Protocol (VoIP),
• Mobile communications, and similar services.

• Mobile communications and video services are taxed at the total Florida rate of 7.44%, plus applicable local tax rate. There is no residential exemption."

So it does appear that Florida is taxing streaming services now.


This might not explain everything but for you Florida people it's something to start with.

[tbdave]

Is there any official word on this?

I mean, it's one thing if they have to start charging tax in Florida. I could understand that. But I'd like to know why it's 13%. That's absurd. Sales tax in Florida is 6%. Even if you added some local tax that might bump it up to 7% or 8%. How can it possibly be as high as 13%?

[jeremymc7]

Speculation here.

With Covid a lot of states have been loosing tax revenue to shipments from out of state. This includes an increase in digital content be it monthly subscriptions direct digital purchase. There have been quite a states that have revised their tax laws to generate more revenue for public works and other critical operations.

Apple historically collected revenue in all states even when they didn't have a physical presence in a state and the state didn't have any law requiring taxes on remote sales. This was allowed as long as the overages were submitted to the proper tax authorities. Some companies did this so it was a more level playing field between states, and also they they could use the same tax method across the country.

I found no evidence that Florida changed anything recently. BUT I did find numerous articles that Florida was one of the last (few) handouts and considering changing.