Apple Taxes Authors' Patience

Authors who do not own Macs are out of luck if they want to sell iBooks in Apple's iTunes store. Authors must either rent a virtual Mac or buy one in order to do something as simple as upload an ePub file. Apple's software interface, iTunes Producer, requires a Mac computer that has a 64-bit processor, at least 512 MB RAM and Mac OS X version 10.9 or later installed. Apple has no app for Windows compatibility. That is annoying enough, but authors face other hurdles.

Apple: Lagging Behind

Apple is famous for its tax avoidance schemes, yet Apple's tax sophistication does not carry over into all areas of its iTunes Connect online business. If authors try to set up an account for a single member LLC, a disregarded entity for tax purposes--and a very common structure for traditionally published authors who occasionally self-publish--they confront an important glitch. Authors cannot properly fill out the W-9 tax form using Apple's online system.

By the time authors get to the tax form, Apple already has the single member LLC's bank account information and the LLC's tax code for verification for royalty payment purposes. Since a single member LLC is a disregarded entity for tax purposes, the W-9 should show the author's name and social security number; the LLC's name should be entered in the appropriate line below the author's name. Apple, however, automatically incorrectly fills in a field on the W-9 with the LLC's information, and authors cannot override it online. A phone call to Apple's help number doesn't help, since the tax department is a separate area with no available phone number for authors.

Yet, even after authors write Apple's tax department, Apple does not provide written confirmation that the account information has been corrected. Moreover, nothing changes in the author's online account, either. Authors have no evidence of a correction and are forced to trust Apple will handle it properly on its back end. Apple has been aware of--and claims to have been working on the problem--for at least three years.

In contrast, Amazon's sign-up process is straightforward, and, if authors need assistance, customer service comes back with the correct answer immediately by phone or within 24 hours by email. The same is true of alternative publishers including Barnes & Noble and Kobo.

Amazon has around 75% of the eBook market share, and Apple has only around 12%. Apple has tremendous room for growth. Yet Apple's bugs are a feature and give the impression Apple isn't interested in competing. Online business is all about compatibility and getting the business details correct. Yet for a large tech company with a stellar reputation, some of Apple's ecosystem seems as if it is a relic of the 20th century.

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