Saturday, March 21, 2009

NY to Collect Sales Tax on Distance Education Courses...

...well it depends on what you mean by "Education"

I was reading the UMassOnlineBlog the other day and I saw this article by a guest blogger. I thought to myself seriously? They are going to tax education? It drew me in, until I read that it wasn't really about Distance Education...

The relevant piece of information here is this:

The department asserts that an e-course offered by SkillSoft Corporation, a New Hampshire-based company, should be subject to sales tax as “software” purchased by the student.

So at this point I stopped being alarmed. It's not distance education, It's SkillSoft! There is no instructor involved in SkillSoft courses (at least not the ones we had at my workplace). NY is not going to tax people taking real online courses with instructors and grades and projects.

Now I am not saying that SkillSoft isn't educational. What I am saying is that in my opinion SkillSoft doesn't count as Distance Education. Someone commented back on the blog and said that it's a slippery slope. I respectfully disagree.

Take the following products:
A Book: Teach Yourself Spanish Complete Course

Software: Rosetta Stone Spanish (Latin America)

Video: Professor Teaches Office 2007

Now can all of these be educational? Of course! Are all these taxed? You betcha! What makes SkillSoft different? The answer is: Absolutely Nothing. SkillSoft is a product. An educational product, but a product none the less. Education is a service. People who seek higher education (through a BA or an MA, through face to face or online means) are seeking a service.

Now truth be told, I would not want to pay tax on my language learning products, or on books that contain the thoughts of major philosophers, but if I head to Barnes and Noble I will pay the tax. Same should hold true for SkillPort.

If any state wants to tax accredited higher education (whether online or face to face), then let's sound the alarm bells ;-)

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