davidw
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Cupertino returns $12.1 million to Apple after long-running sales tax dispute
mpantone said:Huh, I apparently did not understand this particular issue perhaps because I have usually done so from the same county. It's strange that Apple would just bill every online tangible item as a sale from Cupertino.
Anyhow, Cupertino gets to keep some of their tax revenue and now has to tighten their belts and find other sources of revenue. LOL, maybe a bond measure.Not "every" online tangible goods purchases. This arrangement only applies to online purchases made by someone in CA and delivered to someone in CA. This is allowed under CA State sales tax rules. This arrangement do not apply to out of State purchases or deliveries, where the sales tax rules of the State in which the ordered was made or delivered to, applies.In CA, if a business resides in CA, the business can use the CA tax rate of where their business is located. Since Apple online business resides in Cupertino (I would assume in their HQ), they were allowed to tax CA online purchases that were delivered in CA, as though the purchase was made from Cupertino. There was nothing shady going on here between Cupertino and Apple. It would be shady if Apple were to apply San Francisco tax rate to such purchases because San Francisco offered Apple a larger rebate. Even though Apple online business have no presence in SF.Say that you own a pizza parlor near the border of San Francisco and Daly City. In SF, the sales tax rate is 8.86% and in Daly City, the rate is 9.86%. If customers from Daly City were to walk in to your business and order a pizza, they would be charged SF sales tax rate and you would remit those sales tax collected to SF County. But what if a customer in Daly City ordered online, a pizza for delivery. Do you charge them the SF sales tax rate or the Daly City tax rate? Well, in CA you are allowed to charge the SF tax rate and remit the sales tax collect from the online Daly City customers to SF County. It makes things simple. Otherwise, if you charged them Daly City tax rate, you would have to remit the sales tax you collected from online Daly City customers to San Mateo County.Now for San Mateo County, your pizza parlor business is no big deal, even if you do thousands or even 10's of thousands of dollars worth sales to Daly City customers. But what if you were doing millions or ten of millions of dollars worth of business with Daly City customers (that are ordering pizza deliveries online)? San Mateo County will go after you for "their share" of the sale tax revenue. After all, the pizza will be consumed in their county. Of course SF County will not at all be too happy about losing the sales tax revenue. After all, your business is in SF. So the State has to step in and work things out.>There are three scenarios when tax is based on the seller’s address:
In-store purchases
Curbside pickup orders — aka, click-and-collect or buy online pickup in store (BOPIS)
In-state delivery orders in origin sourcing states
Origin sourcing rules apply only in certain states, and only to in-state delivery transactions (when the buyer and seller are both located in the state). Several states use origin sourcing for in-state internet, mail, or phone sales. For example: ..... <
>Generally, if you are located in an origin-based state and make sales to customers within that state, you would charge sales tax based on your location, including any local and state taxes. For example, if you are based in Salt Lake City, Utah, and you make a sale to a customer in Provo, Utah, you will charge the applicable Salt Lake City sales tax on the sale.
In the case of California, if you are based in that state and make a sale to another location in California, any city, county or state taxes will be based on the seller’s location (origin), while any district sales taxes will be based on the customer’s location (destination).<
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Cupertino returns $12.1 million to Apple after long-running sales tax dispute
mpantone said:
The previous linked article from October 2024:randominternetperson said:That scrutiny led to the CDTFA's 2023 audit. The agency concluded that tax revenue from Apple's online transactions should be distributed across the state based on where purchases were actually made or delivered -- not where the company is headquartered.
So, why is the money refunded to Apple, and not those other municipalities across the state?
https://appleinsider.com/articles/24/10/04/cupertino-wins-and-loses-millions-over-californias-apple-tax-ruling?utm_medium=social&utm_source=ai_forums
explains that in a little more detail.
Basically the City of Cupertino gets to keep the tax revenue from 2023 (when the investigation started) until now (2025). A new system will be put into place by the State of California where digital sales tax revenue is collected will go into a new system designed to spread the revenue statewide based on where the digital buyer placed the transaction.
This is just a short term reprieve for the City of Cupertino. They need to figure out fairly quickly how to set their budget accordingly due to a change in expected sales tax revenue from 2025 onward. Apart from Apple, Cupertino is basically a bedroom community with very little retail. It doesn't even have a proper legacy downtown district and its one shopping mall, Vallco failed and is mostly dead.
Read the other article carefully. But the basic gist is that the state has not yet set up the process to disperse that tax revenue yet. As the other article mentions, the ruling affects other California companies with digital retail sales. I'm guessing that companies like Meta (Menlo Park), Alphabet (Mountain View), Netflix (Los Gatos) will be affected as well as maybe others such as Sony Interactive Entertainment (a.k.a. PlayStation) which is headquartered in Redwood City.
Note that for physical goods, there is a long standing system in place that collects sales tax calculated at the point of sale (defined as where the buyer takes possession of the purchased goods). California has a base sales tax however many counties and some municipalities have add-on taxes that increase that amount. So someone buying Gadget A in San Francisco will pay a different sales tax rate than someone in Mendocino County.
This ruling is for digital sales so there is no localized sales tax collection system yet in place. This probably means additional work for Apple (and other digital merchants) who will need to use things like FIPS county codes, ZIP codes, etc. to determine exact sales taxes to be collected just as they do for physical goods (like buying AirPods from store.apple.com).
Until now Apple just collected sales tax based on their location in Cupertino, CA (Santa Clara County) and remitted what was required to the state and county. They did not collect anything more or less. The CDTFA's decision is not retroactive.
It's not "digital sales tax" on digital goods. It's sales tax on "online" sales of tangible goods.In CA, digital goods are not taxed at all. Here in CA, it has been a long standing State sales tax policy that intangible goods are not subject to sales tax. We here do not have to pay any sales tax on online sales of apps, ebooks, digital downloaded music, music or video streaming or news publishing subscriptions, any software delivered over the internet, etc.. In CA, Xbox users have to pay sales tax on a game on a physical media purchased from a Game Stop or on Amazon, but not for the same game downloaded from the Microsoft Store on their Xbox. Other States do have sales tax or some other tax like an entertainment tax, on digital goods.From what I remembered, this all started when counties where Apple have warehouses, were complaining that they should be entitled to some of the sale tax revenue, when products that are purchased online, were shipped from their warehouses. (At the time, I remember counties of Apple warehouses in San Pedro and Sacramento were complaining about loss sales tax revenue, but other counties with an Apple warehouse might have been involved in the suit.) If the Apple item shipped from an Apple Store, the location of the Apple Store received the local sales tax. But since warehouses are not retail stores opened to the public, the sales tax on items shipped from them ended up in Cupertino coffers.The reason why Apple got the refund is because Cupertino had a deal with Apple where Cupertino would rebate a small percentage of the sales tax revenue they received, if Apple were to charge Cupertino local sales tax on all CA online sales delivered from any Apple CA warehouses. These type of deals are (or were not) illegal (in CA) and a common practice in most counties. Even retailers like Walmart, Target, Home Depot, Costco, etc., receives such offers as an incentive to open a retail store in the county. Local sales tax is a huge revenue generator for most counties. And since Cupertino was allowed to keep the sales tax revenue from the last year that CA would allow them to offer Apple such a deal, they owe Apple a small percentage of the sales tax revenue that they (Cupertino) got to keep.
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UK says Apple stifles browser innovation, but chickens out of imposing regulation
anonymouse said:
Sure it is, the UK is just copycatting the EU on these issues.avon b7 said:
This isn't about the EU or the DMA.9secondkox2 said:It’s not chickening out.It’s doing the right thing.For once.In this case, the EU doing nothing is doing the right thing.The whole DMA fiasco needs to be reversed ASAP.
But, it's hard not to see corrupt intent here from the UK "regulators" when they blithely accept, against all objective evidence, the word of Meta, et al. that they are being prevented from doing good for consumers by "not being allowed to innovate" with browser technology. First of all, consumers don't need (or probably want, if they were to actually think about it) innovation in rendering engines (HTML/CSS/DOM/Javascript). "Innovation" in rendering engines serves only one purpose and that purpose is anticompetitive — user and developer lock-in to a specific rendering engine. And, no, that is not what Apple is doing with WebKit, they follow standards and don't add "features" that make websites incompatible with other browsers. Secondly, the facile representation by these companies that they are in any way interested in improving the user experience is laughable; they are interested in improving their own experience in monetizing users, period. So, how do we explain this attack on user privacy, in both the EU and the UK, that is cloaked in terms like "competition" and "fairness" but seems to have no purpose other than to destroy privacy and pervert the concept of fairness?
The regulators in the UK, like those in the EU, are either so ignorant of these issues that they have no business regulating anything or they are so corrupt that they view their job as selling "regulation" to the highest bidder. Personally, I think it's a combination of both. But, the UK in particular have a track record of being anti-privacy in all regards, and the EU has a track record of hobbling US companies to benefit EU companies. It's not surprising that they are engaged in these blatant attempts to undermine privacy and competition, but it is particularly hypocritical of them to pretend they are doing the opposite.It's not that the consumers don't want or need, "innovation" in browser engines ....... so long as it's in the browser they are already using. But for sure, developers don't want to have to develop websites for more than the 3 main browser engines (WebKit, Blink and Gecko) we have now. The last thing they want is to develop websites to be compatible for another browser engine, no matter how much more "innovative" it might be. And Blink is a fork of Webkit but there are enough differences *(improvements) made over the years, that Blink is now considered another browser engine. And have an over 75% market share. All three are open source and "innovation's " are still possible with-in each browser engine. But Google with their 75% Blink market share has nearly full control on how browsers will have to work in order to properly render internet websites. Once Blink approach the 90% market share, developers will begin to no longer see a need to develop for the WebKit engine.With the EU forcing Apple to allow browser engines other than WebKit, this will only serve to cement Blink "monopoly". What did Microsoft do when they needed to "innovate" their Edge browser ...... they adopted Blink. If company has the money to come up with a new innovative browser, it's Microsoft (not to say that they actually have the talent.). Any market share that Webkit looses in mobile, will be Blink gain. Gecko has no mobile presence. This has already happened on desktop computers when Edge started using the Blink browser engine. But the EU politicians are too tech ignorant to see what most here already know. Do the EU politicians actually think some EU firm is going to develop a new innovative browser engine that will compete with or replace .... Blink?If the US DOJ get their wishes and prevent Google from sharing their ad revenue with the owner of the browser, (in exchange for being the default search engine), then we can probably see the end of Gecko engine "innovations", as Google ad revenue sharing accounts for 80% of Mozilla Firefox revenue. And most of Gecko market share will most likely go to Blink.
Here's a good article detailing the criteria thresholds that the EU came up with, to determine which companies would fall under the regulations outlined in the DMA.With the conclusion being .......>The Commission has not disclosed the thinking behind these thresholds. However, a reading of the Digital Markets Act Impact Assessment support study annex, which reported an analysis of various quantitative indicators[1] for 19 digital firms[2], shows three things: (1) the exercise carried out by the European Commission was subjective. There is no magic economic formula that would suggest that these are the optimal quantitative thresholds that maximise the efficacy of the restrictions and obligations imposed by the DMA. (2) The approach applied by the European Commission was most likely based on a backward induction process: the Commission had a rough idea of the companies that the DMA should capture, it then crafted the thresholds accordingly, to be sure the bigger players would be included. (3) Finally, the Commission had to make a clear trade-off: too-high thresholds would limit the impact of the DMA because companies with strong market leverage and capable of limiting competition in digital markets could fall out of scope; too-low thresholds would, however, entail high costs, for example burdening companies with compliance duties when they do not restrict competition in the digital market, or increasing pressure on resource-constrained public enforcers.<
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Phil Schiller recounts concerns over App Store fees for external purchases in hearing
DAalseth said:
And I always thought that was a very bad idea. If I buy a grocery bag from Target, Target doesn’t get a cut if I use it at Fred Meyers.davidw said:DAalseth said:When I first heard about Apple getting a cut from sales outside of the AppStore I thought it was wrong and would come back to bite Apple in the ***. 30% to offset the cost of running the store was fine. But once someone loads the app I never agreed with Apple claiming a cut of sales from other people’s stores. That always struck me as abusive.If one purchased the digital downloaded version using the Amazon app, then Apple charged a commission.
If you buy a grocery bag from anywhere, you own the bag out right. The seller has no say on where or how you can use it. But IP is different. You never own the IP. You are licensed to use it based on the terms of the license. Target don't own any rights to the grocery bag, after you paid for it.When you buy a CD, you can not use the CD or any of the songs on it, like you could with the purchase of a grocery bag.The artists of the songs (or copyright owner) deserves to get paid, if you were to make money using their songs. Commercial use of someone else's IP is not covered under "fair use". But you are allowed to sell that original physical CD, even at a profit, under the First Sale Doctrine in Copyright Laws. But you can never use the IP on it to make a profit, without the permission of its owner.If Apple (along with Google, Microsoft, Sony and Nintendo) did not charge a commission for the purchase of Fortnight Bucks (IAP), when playing Fortnight, using a free app on their devices, then how is Apple suppose to recover the cost of hosting Fortnight on their devices? Fortnight was one of the most downloaded apps from the Apple App Store and Epic made hundreds of millions of dollars selling Fortnight bucks through that free app. The very bad idea was that of Sweeney, when he violated Apple App Store policies and bypassed Apple commission. Policies he had to agreed to before Fortnight was allowed to be a free app in the Apple App Store. This cost him hundreds of millions of dollars (if not over a billion) by now, by getting kicked out of the Apple App Store. (Not to mention the loss from getting kicked out of the Google Play Store, on Android.)
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Judge swiftly tells Apple it can't delay the Google trial
avon b7 said:
It's also possible that this is a huge saving for Google. It won't de losing access to iOS devices, just default access.Pema said:Goodness gracious me! That's a $20 Billion dollar infusion from Google to Apple that just flew out the window. Not to mention the fact that going forward Google will no longer have default access to 2.5 Billion Apple devices. If Google is banking on it's Gemini efforts to save their bacon then they may as well start sleeping in homeless shelters and getting handouts.
Losing access to 2.5 Billion Apple devices is HUGE. Make no mistake. It literally means that Microsoft can now go ahead and cut a $20 Billion deal with Apple to plug Bing or Apple will just need to beef up Safari and build out a data centre to provide comprehensive search results. The good news is with Apple Intelligence they may be able to shortcut the years-long process of aggregating hangers full of data and provide the search results via Generative AI. Forget Predictive. That's like trying to predict the weather.
Although I believe Google has a monopoly in a few areas, I also believe that, in search, they are also the best.
I have Google Search as a default because there is no better alternative.
I'm sure the vast majority of iOS device users see things the same way and will make Google their default as well. I'm sure most EU citizens do the same now that we have choice.
If anything, Apple is now going to be put under the microscope. Without that annual injection of Google revenues (money for nothing) will they suddenly see search as a viable revenue stream and develop their own search engine?
If they do, some people (myself included) will point the finger at the current deal as no more than a 'you scratch my back, and I'll scratch yours' situation.
And yes, that's how I see things now too.
The move to kill these kinds of deals among gatekeepers is essential but only way for competition to flourish is to level the playing field.
The Google/Apple deal only benefitted those two companies and hindered competition.Just exactly when did EU citizens didn't have "choice" of search engine or the "choice" to change the default search engine?As for Apple losing $20 Billion in service revenue from their deal with Google sharing with Apple 33% of their ad revenue generated from iOS device search, Google can still offer that to Apple or maybe a smaller percentage like 20%. So long as Apple don't make Google search the default. Why? This to discourage Apple from making a deal with Microsoft to have Bing as their default.There is no money to be made from offering a search engine for the internet. The money is made from selling targeted ads using search results. I don't think Apple is going to or want to, compete in the internet targeted ad business. The EU Commission will have a field days going after Apple if they do. Remember that BS "Gatekeeper" labeled place on Apple by the DMA? Well that would prevent Apple from promoting their own services, so Apple search can not be the default search, on their own platform. The EU might also force Apple to share their search results with competitors that wants to place ads based on Apple search results.The real question is, are we going to lose Mozilla Firefox. Firefox have the same deal with Google, where Google pays Mozilla a percentage of the ad revenue for being made the default search on Firefox. Though what Mozilla receives is a small fraction of what Apple gets. But for Mozilla, it represents over 85% of their total annual revenue. How is losing the choice of Firefox, good for competition and the consumers?
