Comment by dataflow
5 days ago
> Play billing "must not be used in cases where payments include … tax exempt donations"
> Note: 501(c)(6) is a tax-exempt status; donations are not tax-deductible for the donor. Google's communications explicitly state "tax-exempt".
Isn't it pretty obvious that the problem is the donations aren't tax-exempt, despite the organization being tax-exempt? Your note suggests you already understand this.
Logically, the payment processor (who deals with sales taxes rather than income taxes) should worry about the taxability of the transaction rather than the tax status of the recipient, right?
> Specifically, your app allows users to contribute donations to an organization that is not tax-exempt.
So whoever is writing their email is mixing these two up, but you're reading the policy itself and it is fairly clear-cut what it means for you, right?
We've been seeking official clarification from Google on this for over a month. That's what we're seeking here.
It's not clear given Google's policy wording and replies. We've removed the links, and can move forward once clarification has been provided.
Their emails are confusing, but they came after the alleged violation in private communication, not what you were going from at the time of the alleged violation. If you ignore them momentarily (surely you understand they probably aren't as well-scrutinized by lawyers, which would explain why they appear to mistakenly refer to the tax status of the recipient rather than that of the donation), is anything else actually confusing or inconsistent? Their policies, the relevant laws, and what common sense would have you expect - they seem pretty cut and dried. Are they inconsistent with anything other than their emails, which came after the fact?
From another angle: why/how do you feel the tax-exempt-mess of the recipient itself could sensibly be the determining factor here, rather than the taxability of the transaction itself? Is there any law or precedent or anything outside their emails that would suggests a payment processor should look at the tax status of the recipient rather than that of a transaction?
Aren't donations untaxed?
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Google's policy wording is clear. It is just you don't like what is written.
The policy is far from clear cut, and even having read your comments I am still not sure what you think it's trying to say. The policy suggests that an app may lead users to another payment method where the payment is a "tax exempt donation". What tax, specifically, are you suggesting a donation to OSC is not exempt from? You mention sales tax, is it the case that donations are not exempt from (ie, are subject to) sales tax?
Or are you saying the key point is that the donation not tax-deductible for the donor, which is a different thing to being tax exempt (and does not have anything to do with the "taxability of the transaction")?
The mere fact that they have to avoid dealing with sales tax here (unlike their typical transactions) is clearly extra complication for them. So you can understand that sales tax being 0% (thus "not taxable") can make things harder, not easier.
Having to deal with bookkeeping or paperwork for tax deductions could also make things harder.
In any case, whether you think these are easier or harder, and regardless of which cases should be supported from a business perspective, their policy page (at least the one that I'm reading) very clearly says you can't use their system for such donations.
If you can't use their systems for a donation with a sales tax rate of 0%, then per the policy that means you can route users to alternative payment methods for those transactions. So by your reasoning, if donations to OSC are not subject to sales tax, then what the app is doing should be okay.
(As an aside, I have no idea if donations to OSC are subject to sales tax, but I would be surprised if they were given there is no sale or supply happening, and no one here seems to have suggested they are.)
> In any case, whether you think these are easier or harder, and regardless of which cases should be supported from a business perspective, their policy page (at least the one that I'm reading) very clearly says you can't use their system for such donations.
I disagree, because it uses the loose term "tax exempt donations", and nobody, it seems, can agree on whether that means exempt from income tax (ie, recipient does not need to pay income tax on it), exempt from sales tax, or deductible for income tax purposes (personally I think this is likely what it is intended to capture, and the only real basis on which to distinguish between 501(c)(3) and 501(c)(6) organisations, but in fact is the least supported by a literal reading).
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And they were not right? The issue here is that Google doesn't define tax-exempt properly, but does tell you to not use play. And then throws a fitty when you do that and they decided it's not the right kind of tax exempt?
At least,that is how i read it.
And then the way google deals with these cases is the real problem: no communication, no recourse, just spam HN and pray.
And I am 99.99% certain they don't want such transactions for some other reason, perhaps they can't make as much money from them orso
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> the payment processor (who deals with sales taxes rather than income taxes) should worry about the taxability of the transaction rather than the tax status of the recipient
A donation is not a sale of a good or service. This is not a question of sales tax collection.
I didn't say it's a question of sales tax collections. I said a payment processor deals with sales taxes.
In this case they clearly have to exempt this transaction from sales tax in order to support it, when other transactions through their system do get sale tax applied. So the mere fact that they have to deal with sales taxes in general is likely to introduce additional complications for them even here, in cases where sales tax turns out not to be applicable.
Google don't even process the donations do they? It is a link to an external donation page.
It's a link to a page where you can donate. Google is not involved in the transaction. Google's rules say you can link out for donations. Google is then telling them they can't link out for donations.
They don’t have to exempt anything. Just let them have a link to the donate page like they always have. Which is also how nearly every donation works in the US.
So we don't devolve into semantics, I am just going to use the term "special tax status" to denote anything thab the regular payment flow. I'm doing that on purpose, because part of the argument is that tax exempt and tax deductible are different things. Your argument, as far as I understand, does not actually rely on this distinction. It just comments on it.
I read your comments and what I ended up inferring was that it relies on a few premises:
1. Google states in their policy that their billing platform cannot be used for [special tax status]. 2. Google would be presented with an undue burden if they had to alter their processes to process donations with [special tax status], which may potentially involv extensive manual review manually. 3. Therefore, despite the wording, the rules and undue burden are clear that you cannot use Google Play billing for [special tax status].
I've read the rest of your comments downthread and I think that I'm representing your position accurately. Again, if I'm not, I legitimately want corrections.
The issue with going from the premise to the conclusion is that if you look at their actual payment flow to the Open Collective it seems to be just a webview to their donation page. I mean, it doesn't look like Google's payment flow at all and I'm pretty sure Google doesn't accept ACH payments directly.
If Google wants to avoid extra work, they literally just can do nothing about it and the donations on that page will go to a tax exempt organization.
I'm going to take a look at the rules right now and either update this comment or reply to it. (Sorry, I figured I would post it because I'm not sure when I would be able to post another.)
P.S. I probably should have out of this to the top, but I do want to mention that several people pointed this out in the comments but I wanted to be a bit more specific about the payment flow, and what we're actually debating.
> So whoever is writing their email is mixing these two up, but you're reading the policy itself and it is fairly clear-cut what it means for you, right?
This (rhetorical?) question seems to suggest that you have a level of understanding or have done the analysis required to come to such a meaning. It seems to me that it would be most beneficial if you simply shared that analysis.
To me, seeing this here for the first time, it is not at all obvious what the terms mean for someone seeking a donation, because of the past behavioral detail of WireGuard going through something similar. The terms you quote seem to me to state that since there is a tax exempt donation involved, the prohibition on routing to a non-Google Play billing workflow should not be in effect.
Yes, but unsurprisingly most people don't understand that distinction well enough.