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rubberjohn
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Operating from a US domain

Post by rubberjohn »

I am working on a system that generates revenue through adverts. Every month a user(s) will win a percentage of the revenue for that month.

Bearing in mind the following:

• The company, and its head office, will be based in the UK.
• The system (and prizes) will only be available to UK users.
• The bank accounts that the advertising revenues will be paid into will be based in the UK.
• The hosting and domain name registration will be based in the US.

What will the company’s responsibilities in the US be regarding tax and lawful operation of a business (ie from what I have explained are there any US legal issues that concern me or would they only be relevant if I was operating in the US and making the system available to US residents?). I ask this because it would be considered gambling and I know that gambling is illegal in most of the US states.

Do I have any legal requirement to register my company name in the US?

Thanks for your help.

rj
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feyd
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Post by feyd »

Last I saw, it was illegal now on a federal level to do online gambling in the US: http://www.gambling-law-us.com/Federal- ... ng-ban.htm
rubberjohn
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Post by rubberjohn »

but does that not mean that it is illegal for us citzens to take part in online gambling - or is that irrelevant?

also what if the game is free and the user is selected at random each month without having to pay any kind of sunscription or entry fee?
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feyd
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Post by feyd »

rubberjohn wrote:but does that not mean that it is illegal for us citzens to take part in online gambling - or is that irrelevant?

also what if the game is free and the user is selected at random each month without having to pay any kind of sunscription or entry fee?
The only way to be sure is to read the act, first hand or by-way of a lawyer (or three).
abbot
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Not acceptable for me

Post by abbot »

Maybe this is becoming off topic here but I just could not restrain myself from writing a few lines. I agree that the online casinos have made the life miserable of many people and as a result they have had to lose their all, but think of this situation, this is a problem of the individual and not the casinos. If something has to be shut down then there are many other ills prevailing in the society which are doing more damage than these casinos. Where do people like us who go to these virtual casinos for mere relaxation do then? Had the authorities concerned should have thought about this a little more this situation would never had raised.
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m3mn0n
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Post by m3mn0n »

You say the system is only available to UK users, and it's a UK based company... so why are you even bothering with US-related business registration and taxes? It's entirely unnecessary.

Get UK-based hosting to avoid your data being subject to US law and anything to do with the US. That's my recommendation.
rubberjohn
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Post by rubberjohn »

ok scratch the uk based company - it will only be available to uk users but the company and its bank accounts will be based offshore.

it will be desirable to be hosted in the US as i can get good hosting and domain deals and avoid uk tax.

from what i have read about the act it specifies that taking money from us citizens for gambling purposes is illegal - as this site will not take any money from its users and will not even be available to us citizens i cant see how the new legislation would apply
Charles256
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Post by Charles256 »

for the record, unless i missed something, it's only illegal for u.s. banks to work with those online gambling sites. the actual act of online gambling is legal.so if a u.s. citizen has an over seas bank account, loop hole found. obviously, have your lawyer double check me. :-D
rubberjohn
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Post by rubberjohn »

exactly from what i have read about the act, the system i am involved with will not be breaking the law. this brings me back to my original question which was about tax and registering company names etc in the us and what my responsibilites in that those areas would be - would i be liable to pay tax on advertising revenues for a system not available to us citizens but hosted in the us? ...

i think to get definite answers im going to have to pay Chuck Humphrey $200...

thanks for all the help
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feyd
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Post by feyd »

The answer is often based on where you register the company.
rubberjohn
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Post by rubberjohn »

so it should be ok if the company was registered offshore, say the isle of man or somewhere like the seychelles or any other tax haven?
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feyd
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Post by feyd »

That question can really only be accurately answered by your attorneys, accountants and so forth, not us.
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