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No tax with steam wallet funds. Why?

Personal Finance & Money Asked by Warlockofdarkness999 on April 15, 2021

(I tried to put this question in arcade but they said it wan’t relevant so I came here.) I just noticed, when buying a steam game with steam wallet funds, that it did not charge any sort of extra tax for the game. Not 10%, not 5%, just a rather nice 0% tax. As happy as I am for this, does anyone know how valve is pulling this off legally?

One Answer

I am assuming you live in the US.

It's because of this legal concept called "nexus". Essentially, it means that if the company doesn't have a physical location where you purchased the game, then there is no tax. Since Steam is an online platform with no physical locations to go and purchase games, there's no tax.

Correct answer by Michael on April 15, 2021

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