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Forums - General Discussion - How much tax do you Americans pay on Games on average.

psychicscubadiver on 14 July 2020
John2290 said:

As a European lad, the tax system in the US is kinda hard to wrap the noggin around, here in the lands of the socialised free we bundle it all in VAT as long as we aren't self employed. I've been trying to figure out parity in pricing and the US tax system is the the spanner in the cogs to figure out what next gen price increases mean for us. Do you guys pay the Tax upfront? How much and I know it's on a state by state basis and even county by county basis so lets make an example.

Here, Ghost of Sushi is releasing at a standard of 69.99 euro which currently equates to $79.60 with all tax included in value added tax or VAT. On the spot, it's done, in the deal, we pay that price and the sale is complete. PSN won't show me what the % of VAT and I'm not purchasing it to find out but someone on here calculated it would be around $58.00 with 20% tax on games in general. Which means parity, or even slight savings.

I wanna know more about this TAX system in the US to try and calculate what this extra $10 9th gen game price increase will mean for us. It's just one more thing that will keep me out of next gen, I'm not paying 79.99 as standard for games. Not fucking happening, it's already such an expensive hobby.

Maybe we will get off but if they pull this off, we aren't far behind. So, you're American tax system, please explain to a lowly Irishman. What do you pay on average for your 59.99 games? Is it always the same? Are you being extorted more than 20% or less?

Sales tax is decided on the state level. City and County level taxes are on generally based on other things however they can enact special taxes if they want. I've heard that the 'luxury tax' on alcohol is New York City is incredibly steep. Anyway, depending on where you live the sales tax generally ranges from 6-10% so on a $60 game, you pay $63.60 - $66 total. I think what surprises people is that no US store ever lists the sales tax on the price, you're just expected to know what the amount is for your state and they add it on at the register.



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psychicscubadiver on 14 July 2020
John2290 said:
psychicscubadiver said:

Sales tax is decided on the state level. City and County level taxes are on generally based on other things however they can enact special taxes if they want. I've heard that the 'luxury tax' on alcohol is New York City is incredibly steep. Anyway, depending on where you live the sales tax generally ranges from 6-10% so on a $60 game, you pay $63.60 - $66 total. I think what surprises people is that no US store ever lists the sales tax on the price, you're just expected to know what the amount is for your state and they add it on at the register.

Is that all? So we really are getting shafted in Europe then now that the US currency is so strong. We're paying around 10 euro more after tax. Maybe they'll only target you Americans so with the price hikes since they have already, silently hiked us up over the years. 

I dunno. Governments add tax on top of what the company gets, but they do know that end price will affect sales. Hard to say if the companies will accept a smaller profit margin in Europe to offset the higher taxes and move more units or if they'll just apply the price increase across the board and see how the dice fall.



Dulfite on 14 July 2020
John2290 said:
psychicscubadiver said:

Sales tax is decided on the state level. City and County level taxes are on generally based on other things however they can enact special taxes if they want. I've heard that the 'luxury tax' on alcohol is New York City is incredibly steep. Anyway, depending on where you live the sales tax generally ranges from 6-10% so on a $60 game, you pay $63.60 - $66 total. I think what surprises people is that no US store ever lists the sales tax on the price, you're just expected to know what the amount is for your state and they add it on at the register.

Is that all? So we really are getting shafted in Europe then now that the US currency is so strong. We're paying around 10 euro more after tax. Maybe they'll only target you Americans so with the price hikes since they have already, silently hiked us up over the years. 

Aren't your taxes, in general, much higher over there to pay for all the socialized stuff?

It will be a long time, if ever, before USA has those level of taxes collectively. I live in Missouri, which is on the lower side of the tax rate for US I think. People around here want to keep as much of their hard earned money as possible generally (conservative state).



LudicrousSpeed on 14 July 2020

Taxes vary by state but sometimes cities can charge a special tax to pay for something. For example when a sports team builds a stadium and gets hundreds of millions in funding from the government, the government will add a tax on certain things to pay for that. Never vidya games though.

Tax here is 8.25%. So on a $59.99 game I typically pay $64 or so.



sethnintendo on 14 July 2020
Dulfite said:
John2290 said:

Is that all? So we really are getting shafted in Europe then now that the US currency is so strong. We're paying around 10 euro more after tax. Maybe they'll only target you Americans so with the price hikes since they have already, silently hiked us up over the years. 

Aren't your taxes, in general, much higher over there to pay for all the socialized stuff?

It will be a long time, if ever, before USA has those level of taxes collectively. I live in Missouri, which is on the lower side of the tax rate for US I think. People around here want to keep as much of their hard earned money as possible generally (conservative state).

Maybe your state should raise tax some more to invest into your school and driver education system.  Your state has just as bad education and drivers than Texas the state I currently reside in.



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vivster on 14 July 2020
John2290 said:
psychicscubadiver said:

Sales tax is decided on the state level. City and County level taxes are on generally based on other things however they can enact special taxes if they want. I've heard that the 'luxury tax' on alcohol is New York City is incredibly steep. Anyway, depending on where you live the sales tax generally ranges from 6-10% so on a $60 game, you pay $63.60 - $66 total. I think what surprises people is that no US store ever lists the sales tax on the price, you're just expected to know what the amount is for your state and they add it on at the register.

Is that all? So we really are getting shafted in Europe then now that the US currency is so strong. We're paying around 10 euro more after tax. Maybe they'll only target you Americans so with the price hikes since they have already, silently hiked us up over the years. 

Maybe you should remember where those taxes will go. We do pay more but we also have a higher standard of living than in 3rd world countries like the US.

I'm happy that we pay so much taxes in Europe and as a result are enjoying many conveniences others don't have.

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Last edited by Pemalite - on 16 July 2020

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vivster on 14 July 2020
John2290 said:
vivster said:

Maybe you should remember where those taxes will go. We do pay more but we also have a higher standard of living than in 3rd world countries like the US.

I'm happy that we pay so much taxes in Europe and as a result are enjoying many conveniences others don't have.

Yes, After Covid I never appreciated how having that slight evil of socailism on the side of a republic/democracy can be so efficient and helpful, as long as it doesn't go further towards communism i'm happy to pay extra if even as insurance for when things go sideways or if it helps others out when they need a lift. I've needed that lift myself and never realised how much more of a lift it is than the US and what we get for giving that bit extra. 

But sure lets not make this political and do that nonsense with the snide remark on the US, that's bait man, c'mon. It also shows you have don't understand the classification of first, second and third world countries actually means.

I know the classification means absolutely nothing anymore. Just like "democracy".



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VAMatt on 14 July 2020

Retail sales taxes in the u.s. range from 0% to about 10%. As others have mentioned, most of that is determined at the state level, but some of it is at the very local level. There is no national sales tax.



VAMatt on 14 July 2020

Also, in most of Europe, the item is being taxed at every level - whenever value is added. In the US, the only tax is on the retail sale. I think the European system is terrible, as it hides the taxes from the consumers. That is totally unfair, and is a big part of the reason taxes are so high in Europe. People don't even realize how much of the purchase price they're paying is going to the government, so that don't push back as much. In the US, it is quite literally spelled out on the receipt, and very easy to understand.



Barozi on 14 July 2020

The better question would be: Are $60 games really $60 at launch in US stores or can you get them cheaper?

In Europe, prices are be quite a bit lower than what our MSRP suggests and I feel like in the US it's closer to whatever their MSRP is.

For example: F1 2020 (a game that released 4 days ago) is already down to €50, that's €20 below MSRP.
https://netgames.de/Playstation-4/PS4-Spiele/Rennspiel---Simulator-1018/f1-2020-70-jahre-f1-edition-ps4.html

Getting a game for 10€ less on launch day is not uncommon.