Xbox Arcade Games Unleashed On Amazon.com

I hadn't thought about the fact that Arcade purchases could now be done in such a way to help co-optimus, intriguing...

Though I do have to pay taxes to Amazon and not when I buy stuff through Microsoft.

I didn't have to pay tax when I bought a code. I tested it earlier.

Nick, do you normally have to pay state sales tax through Amazon? I have a distribution center in my state, so I have to pay sales tax on all Amazon orders.

I just checked, at the final checkout screen, it is showing a sales tax for me.

Hrm. I don't think I do, though I'm not sure. I find it odd you are taxed on digital goods though.

On being taxed for digital goods especially for something that is downloaded - somehow I feel like that should absolutely be exempt!

--- Replying to bapenguin -----

If you're curious about the subject, CNET had a great article looking at the state of digital taxation last year. It's all across the board on how states are approaching this, and dozens of states have either already tried passing legislation taxing digital goods or are seriously considering it. Others collect tax on them even if it's not clear whether or not the laws allow it.

I don't have a philosophical problem with taxing most digital goods, as they're really just a different format of physical media I would have been buying a few years ago. I do worry a great deal about the future of sales tax laws in general because I'm an online retailer. Some of the tax plans I've seen would have the potential to add a great deal of complexity and expense to my business.