Yes, where required. Napster complies with all relevant US federal and state laws with regard to sales tax on digital subscription services. These laws have been changing, and a recent US Supreme Court ruling upheld the right for states to collect sales tax from companies that provide digital services. As a result, more states now require digital service providers like Napster to collect and remit sales tax on paid subscriptions.
If you live in a state that charges sales tax on digital services, Napster will automatically collect sales tax along with your monthly payment. Your monthly charge will reflect the normal retail price of your subscription plus sales tax calculated at the rate set by your state. The sales tax we collect will be remitted to the State’s department of revenue. Sales tax is collected at the time of the transaction, which is why you might see a slightly different price on your billing statement compared to the rate that’s advertised on the Napster website.
We collect sales tax based on the address information associated with the payment method you’ve provided. If you've moved since signing up for Napster, you will need to update your payment details on the My Account Page to ensure you’re being charged correctly
You can also view your detailed billing history at any time on the Napster.com My account page.
Frequently asked questions (FAQs)
Q: When & Which states are affected due to this change?
Napster currently collects state sales taxes in
New Jersey (NJ)
Napster will be required to collect sales taxes in the following additional states:
North Carolina (NC)
South Carolina (SC)
Q: Why did this change and how will I be charged?
Due to recent changes in state tax law and/or state tax law compliance requirements, additional states now require digital service providers like Napster to collect sales tax on subscription transactions. Napster will begin collecting sales tax in these additional states effective October 1, 2018. We collect sales tax based on the address information associated with the payment method you’ve provided. If you've moved since signing up for Napster, you will need to update your payment details on the My Account Page to ensure you’re being charged correctly.
Q: Does this mean I will get a price increase for the monthly subscription fee?
A: The retail price of your Napster subscription is not changing. If your state has recently decided to collect sales tax on digital services, the sales tax based on your state’s tax rates will be added to your monthly charge.
Q: My state charges sales tax but isn't in that list--will I be charged sales tax in the future?
A: We regularly monitor sales tax collection obligations. If we determine in the future we are required to charge sales tax in your state, then we will collect sales tax based on the address information associated with the payment method you’ve provided.
Q: Why should I pay sales tax when other music streaming services do not charge sales tax in my state?
A: Napster uses multiple methods - including external tax experts and leading third-party technologies that maintain up-to-date information on sales tax laws and rates - to accurately determine where we are required to collect sales taxes on our subscriptions. We are confident that collection of sales taxes on our services is required in your state.
If you have any other questions about your subscription, please contact us here or If you have questions about sales tax policy, please visit your State’s department of revenue website.