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WMC
Contributor
WMC
Posts: 20
Registered: ‎01-26-2011
My Device: BlackBerry PlayBook

Do we pay taxes on our free playbook?

This is what it says in the T/Cs

 

6.7 Taxes
Each Eligible Participant will be solely responsible for any and all applicable taxes and any other costs, expenses and fees (including customs tariffs and import duties) which are not stated in the Terms and Conditions as included with the Device.

 

 

I am from Ontario, Canada I wonder if I will have to pay taxes. Does anyone have any idea, I have never really got a 'free' item before so I am not sure if we have to pay the tax on it.

 

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Developer
jetstreamblue
Posts: 121
Registered: ‎01-21-2011
My Device: Z10 LE #00055

Re: Do we pay taxes on our free playbook?

Well, from the order form confirmation:

 

Qty   Item ID            Description              Unit Price Extended Price
1     Free BlackBerry Pl BPB                           $0.00          $0.00
                                       Subtotal                      $0.00
                                       Sales Tax                     $0.00
                                       Total                         $0.00

 

(I'm from Ontario, Canada)

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Developer
thesmileman
Posts: 345
Registered: ‎03-13-2011
My Device: Playbook

Re: Do we pay taxes on our free playbook?

You do have to pay tax on free items you recieve. At least in the us. I don't know about you crazy Canadians. :smileyhappy:
Contributor
nathanpdaniel
Posts: 11
Registered: ‎02-28-2011
My Device: Not Specified

Re: Do we pay taxes on our free playbook?

By no means am I an authority on this but, as far as taxes in the US go, vendors may need to fill out a special form for prizes which at tax time next year will have an effect there.  However, I've received everything regarding this particular "promotion" except the playbook itself and have yet to have to fill out any of the necessary tax related documents.  

I have won previous development contest in which I won prizes where I was responsible to pay taxes.  At the end of the year, the prize value was considered "income" - that extra income is what the whole tax thing was about.  I had to fill out all the tax paperwork to even "accept" the prize.  Nothing similar has come so far.  It may be something included as part of our "earnings" from selling apps too.   However, that's purely an assumption on my part.  RIM could just be an awesome company who really support their devs with absolutely free goodies.

 

It could also be refering to some locations force you to count this type of deal (getting something in exchange for something else) as income and you have to pay taxes on it.  

If I had to guess, I'd say it's just to cover their bases.

Developer
peter9477
Posts: 6,473
Registered: ‎12-08-2010
My Device: PlayBook, Z10

Re: Do we pay taxes on our free playbook?

 


nathanpdaniel wrote:

By no means am I an authority on this but, as far as taxes in the US go, vendors may need to fill out a special form for prizes which at tax time next year will have an effect there. 


 

Not that this was not a contest, or competition, so there's no "prize".

 

I have no idea what impact that may have on things either here (Canada) or elsewhere, but I even recall one RIM posting/answer somewhere that was quite careful to correct someone on that.

 

As far as taxes in Canada go, if the thing is shipped from the US to us here, we'll likely have to pay HST when it arrives, usually with a credit card out on the front porch.  I'm hoping they come from within Canada (at least for us Canadians) and that I don't have to pay anything more.

 

If it's not a prize here, it's probably income and we'd have to declare it as such on income tax returns, but I'll be deciding that for myself on the basis of whatever paperwork arrives with it.


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Developer
nobleRobot
Posts: 54
Registered: ‎02-10-2011
My Device: Free Playbook!

Re: Do we pay taxes on our free playbook?

[ Edited ]

There are a few aspects to it that it depends on (this is from a US perspective, mind).

 

There is a limit to the retail value of "prizes" and other such things that you don't have to pay taxes on. It's called unearned income, and I think (not certain) that the value needs to exceed $950 (in the US anyway).

 

But, this may not count as strictly unearned, since it could be seen as payment for development work. Earned income has a much lower threshold for taxes, but I'm pretty sure you wouldn't have any trouble claiming it as unearned income.

 

Going further, I remember noticing that my "receipt" from the Playbook supplier "E-store" lists the value of the product as $0.00, and the name of the product was "Free Blackberry Playbook." More than likely this is just a convenience (since the price still wasn't announced), but generally things you order which actually come for free (buy one get one deals, 100% instant rebates, etc.) are listed at full value minus a discount for the full value. Perhaps Blackberry is specifically categorizing this as a separate product with a retail value of zip nada nothing.

 

Also, you might technically not have to consider it a prize or earned income at all, but a "purchase" at the cost of $0.00, and for which the *sales* tax was calculated accordingly. It doesn't really matter what the retail value would be at Best Buy, because you bought it from the "E-Store." Imagine having to pay income tax on the value of all the retail discounts you find!

 

This is especially since it had no retail value whatsoever when most of us "purchased" it. Imagine if the Playbook came out and retailed for $10,000. Most of us had no idea what the "retail value" wold be when we "won" our Playbooks, and if for some reason the unearned income tax we would have to pay on it exceeded the amount we'd be willing to pay for it, how fair would that be?

 

In the end, I think, at least in the US, there are plenty of justifiable reasons not to report it as income, some pretty ironclad, others a little hazier. If this were a multi-thousand dollar prize, it would more than likely qualify, but because the Playbook is only $500, I don't think you'd feel like you were "getting away with anything" if you didn't report it. I expect the law is similar in Canada.

 

I don't want to lead anyone astray, so don't take this as gospel, and if anyone knows better, please correct me.


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Developer
zezke
Posts: 1,004
Registered: ‎12-12-2010
My Device: Z10 (red Limited Edition)

Re: Do we pay taxes on our free playbook?

Yep, as for Belgium this will result in a tax of about € 74 (21 % VAT over $ 499 value, no import duty). However there is no VAT on gifts, but I doubt RIM will send it as a credible gift.

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