> 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?
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?
I don't know every jurisdiction, but that's not the only relevant factor. If they are tax-deductible, they still introduce the need for paperwork etc. for the payment processor to let the payer deduct it from their own income. A 0% tax on some action doesn't imply you don't have to worry about tax law when performing said action.
Though I think you can just read the policy and take it at face value and not even have to know any of this beforehand.
But the complaint isn't that Google won't process the payment. It's that they won't allow them to link to an OpenCollective donation page, and presumably OpenCollective would handle anything like that.
That’s not true. If a donation is tax deductible that’s just between the IRS, the recipient and the donor. The payment processor, banks, etc don’t do anything special.
So I'm only a layperson and don't know what is strictly legally required, but my understanding (based on reading/third-hand information) is that payment processors do in practice end up with more work to do for this, whatever the reason. Quoting from [1]:
> Nonprofits have strict tax regulations when accepting donations. The more a payment processing system can assist with these regulations, the better for you and your donors. For instance, donors need to receive specific documentation for tax-deductible contributions, such as donation receipts. Additionally, different types of donations may involve different tax considerations for the donor and the organization. Nonprofits also have to consider any state and federal regulations regarding their charitable solicitation and fundraising activities, which may vary depending on location and activities.
And there's of course also exemption from sales tax which they have to handle too.
Sure, but that’s still a problem of their own making. These people don’t want to use them to process the payment. They just want to link to their own web page.
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).
> 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.
I'm not seeing "if not {this}... then {that}" implication anywhere that you're citing. i.e. I do not see anything that implies at least one of the billing systems must be permitted for any given app. All I'm seeing are some sets of conditions under which you can use Google's payment system, and other sets of conditions under which you can use an alternative billing system. Sometimes they overlap and sometimes neither applies.
What's clear to me is:
- Page [1] says that you can't use their billing systems for "tax-exempt donations" (however that is supposed to be interpreted).
- Google's last correspondence says "For more information about alternative billing and external linking options available in some countries and regions, see the FAQ", and does not claim that such options are (or aren't) available to them. Page [2] says that this varies by country, and it's not clear to me what countries apply to them, but they seem to be in Japan. I am unclear on what they have/haven't done here, but it sounds like they have not followed all the requirements in [3] (or whatever the relevant requirements are), as [1] says: "Developers serving users in eligible countries/regions may offer users an alternative billing system within the app if they enroll in the applicable program and agree to the additional terms and program requirements."
I'm not sure if you have more information beyond this, but that's all I'm taking away so far. Perhaps I'm missing something?
And obligatory disclaimer (because this is HN): none of this is to suggest I like these circumstances; I'm just discussing the facts as I see them written.
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
I'm pretty sure they could support this if they wanted to, which implies they don't want such transactions. And they obviously aren't going to make it easy to get around something they don't want. So we agree on that. It sucks. I'm not debating any of that. I think our only disagreement is on whether the policy is clear, and AFAICT it is, as terrible as it might be.
> 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.
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.
> 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?