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I have been steering clear of TM issues by only regging NON TRADEMARKED names in GENERAL catagories and making sure that no-one owns a trademark on the name. But now I just read this and it seems we as domainers are "rubbish" whichever way you look at it.

"You don't "buy" a domain name. You register it. Why do I say this? No matter how many domain names are registered, the price stays the same. So you, the cyber-squatter, pay $25 or whatever to register the domain, then you take a payoff from someone else to transfer it to them. Basically, you are taking advantage of a monopoly, ICANN, to make a few bucks. **** off and die.

The whole reason people have been fooled into believing cyber-squatting is OK is that improper language including terms such as "buying" and "selling" have been used to describe it. I implore the press to start using proper terminology such as "registration" and "payoff" to refer to these acts when they are applied to registering domain names and transferring them in exchange for money.

I really don't care about the distinction others make between "cyber-squatting" and "domain name speculation." It's all the same to me, except that one is illegal under US law. Doesn't anyone care about ethics any more?.


I'd be just whining if I didn't offer a solution. The simplest solution would be to remove the artificial limits on the size of the top-level namespace, allowing any random string of characters to be used, except perhaps reserved ones for countries, etc. Then .com domain names would cease to be so sought-after. Another solution would be something similar to my proposal for a cooperative DNS infrastructure.

Cyber-squatting is a symptom of problems in the very structure of the Internet, one that warrants a technological and social solution, not a legal one.".

Sean R. Lynch..

Comments (41)

Could you post a link to where that was posted?..

Comment #1

Yes here it is

And here is the link to the guy who wrote it

And this is where I found the link to the above article.

Comment #2

Regardless of how one feels about this issue, there is already legal precedent that defines domain names as property. Since when has this become the basis of ownership? Let's see ... no matter how many copies are bought, the price of baseball cards remains the same. If they experience unusual demand, I guess they simply print more copies. Does that mean I didn't buy and therefore don't own my collection? Try taking them away from me then...

Comment #3

It is a fine line of property or not. but beware, the government taxes all property you own, so conceivably, they could tax domain names in some form if it is considered property. I am still of the beleif that we lease domains, we have rights to them when we pay our registration fee. There are rules and restrictions we must adhere to in order to keep the domain...

Comment #4

That ideology could be applied to anything you buy and sell. When a real estate developer buys a foreclosed property (reg fee) and resells it a month later for MARKET VALUE which a great deal more than he paid for it, is that ethically wrong?..

Comment #5

Sounds like someone who's butthurt they couldn't get the domain they so desired...

Comment #6

As someone else posted before, it depends on what side of the door you're on...

Comment #7

I'd like to know where his place of business is so I can journey over and make him sell me whatever service or product he has to offer at cost...

Comment #8

When you buy property, by law you must pay taxes on that property. If you do not pay, you lose it in a tax sale so the govt can get the taxes owed. But we own the property outright, if you don't pay taxes, you are breaking the law...

Comment #9

I understand, it's not a perfect example. Lets apply it to different item. If you strolled the world's beaches looking for the most beautiful seashells, would it be wrong to bring them home, put a price tag on them and sell them at a high-end boutique for profit? After all, they're free for the taking. You only spent gas money to get to the beach (reg fee).

It is up to the potential customer whether or not it's worth buying at your asking price. If they don't think your price is fair, they could invest THEIR time seeking out the best shells for themselves (or domains). On the other hand, if they love the shell (domain) you found, and knowing it takes a lot of searching to find the perfect shell (domain), they may think your asking price is a bargain.

It takes many hours to find a great shell, or a great domain. It takes time and overhead to market and maintain your collection of shells (domains). Clients who come to you to buy your shells (domains) do so because you've already done the leg-work and invested the time. It is their choice to buy from your display case rather than spend countless hours or days finding one on their own. They are buying convenience...

Comment #10

There are both taxable and untaxable properties. Real estate of course belongs to the former. But how about diamond rings, antiques, bicycles, guns, etc? While we could get charged a sales tax upon purchase (just like domain names if you buy from a local business), unlike real estate we don't pay taxes on these every year. But still we "own" these valuable things...

Comment #11

Domains are rented from icaan. They are not property and I would love to see this "precedent" that armstrong talks about. We sign lease agreements whenever we purchase a domain.

Binaryman I am really puzzled from your posts. Are you a person that needs to have some strong moral and ethical way to make money? You seem to read into the whole domaining thing on a good vs evil plane. Who cares...make money. Don't rip people off and follow the rules as best you can. The world ain't black and white and neither is domaining. Sorry but I know of no 'domainer' that doesn't have a dirty name or two in their portfolio.

I sleep pretty good at night. This is domains and business. No one is killing people here.

As for that's pretty much true but the problem is all structures have places to be exploited. He says to diminish the .com effect then allow any extension. That's stupid. We already have lots of extensions and it only ADDS value to the .com as it's most sought after. If we have 10,000 extensions .com would still be king. Also if you allowed any extension then squatting could be worse.

Where do you come up with these articles btw? Are you googling for "I don't wanna be a squatter" or what?.

This thread and your attitude about domaining is upsetting me more and more. I normally don't get unhinged but really...what's your point in all this? If you really feel that guilty about domaining then quit. I personally have a lot of generic clean domains like,, and that have zero TM problems. There are LOTS of generic term names that are really the gems of domainers. Go take a peek at and you will see week after week of top sales are GENERIC terms with no TM problems. So what if a few TM domains are bought and sold...the nuts and bolts of most domainers is GENERIC terms.

You as a new domainer stand very little chance of registering any decent .com generic terms. Maybe this is your problem. Are you getting fed-up with whois queries and finding every name you can think of taken? Why get mad because someone got it before you. Obviously you are searching cuz you want why not be happy for the guy that did. Or better yet email him and try to buy it. Basically domaining for good names now involved buying 3rd party.

It's the names I buy at places like this that I do MUCH better with.

In your subject you say you feel like a criminal...for what? You can't go to jail for this crap. There might be civil penalties but jeez that's really rare. You think we are "rubbish" just cuz some putz wrote 2 paragraphs about cybersquatting??? Sorry but cybersquatting has many definitions and normally they involve TM infringement. If you are steering clear of TM domains (which is EASY to do) then why feel like a criminal? Is everyone who tries to make a buck a criminal? Every level of capitalism involves a person making money off someone or something. From the farmer to the fisherman..from the grocer to the truck driver. EVERYONE makes money off someone.

Jeez that was a long rant...I hope I didn't come off like a jerk

I knew there was a thread I read from jberryhill about domains as property.

More digging and I got this from

This here is relevant too:

Comment #12

I've heard the same drivel for over a decade. Unfortunately this article isn't dated so I don't know if it is original old drivel or rehashed new drivel. All I know is it's drivel whatever the case. Sorry guys, TLDs make sense, they work, and they're here to stay. Which government is that? What property is that? I have a TV set that's my property and I've never paid a cent in tax on it. And no, there is no VAT where I bought it.

This whole you'll pay taxes it domains are property is largely a figment of someones active imagination. I can't speak for Armstrong, but he might be referring the the case. In a nut shell, NSI screwed up and allowed someone to steal the name from the original owner. They then claimed they weren't liable because it wasn't property, they had all these terms and conditions, etc. The judge didn't buy it, said there were some property rights for domain names and ordered NSI to pay millions in compensation.

Also, you can't lease or rent something that's not property. Technically they are claiming a name is a service, not a thing that you rent...

Comment #13

Yes, the case set a legal precedent that defined domain names as a form of property...

Comment #14

Prima, there are ways to to but items without taxes.. froma neighbor, craisgslist, auction, street corner, flea market, etc... but if you buy it from a store, you are going to pay taxes on it, or at least the person who bought it paid taxes on it.

As far as the active imagination about taxes, there are very few things in life that are not taxed, I pay tax on food, utilities, furniture, candy, drinks, gas, vehicles, property, etc (please keep in mind, some items are sold with tax INCLUDED in the price). What makes you think at some point, the government sees a million dollar sale from a domain and they get no piece of the action, they say it is property and needs to be taxed. Eventually, it could come up.

In the US, we are tax happy, please keep that in mind (where is the is the central registry located?).

I see domains as intellectual property, and we have limit use of that property when we register the domain. Notice we register and not buy domains...

Comment #15

DNQ you are talking about a sales tax. We already pay icaan a quarter on every registration. A tax doesn't make something a property...only that a government has found a way to tax it. Services in some places are taxed too.

I have not read up too much on the case...

Comment #16

Interesting post binary - the article is so generalistic and as others have said could be attached to a number of circumstances... But an interesting point of view nonetheless...

And nice to see the "domain police" partaking in yet another TM related discussion....

Comment #17

If reselling domains was made illegal, can you imagine how many people would be out of jobs and how many websites would be no more?..

Comment #18

Labrocca, there are sales tax (like whe you SELL a domain), excise tax, transfer tax, VAT (in some countries), and I am sure the government can come up with something creative to take our money away. My point is, if you make domains along the lines as tangible property, the government may find a way to tax it (and retax it in the case of a reseller). I know where I live, if I buy a used car, I have to pay taxes on it (even though the original buy already paid taxes on it). As you said, we pay 25 cents in taxes, imagine if the government found a way to tax the domains when we resell them. Using my car analogy, the buyer would ahv to pay taxes on the domain purchase (which we would have to report). On top of that, we culd be subject to capital gains if you are not in business already.

In conclusion, all I have said is be careful how the government views domain sales...

Comment #19

The only reason many domain sales are not taxed is because they are not monitored, since most sales are conducted at the personal level. Like other consumer items (jewelry, baseball cards, antiques, paintings), capital gains taxes will accrue only if the transaction is reported. While it may be legally required to report all your personal profits (or not, depending on where you live), many transactions at this level - whether for domains or jewelry or whatever - are not.

Still, the issue of taxes is irrelevant to whether something is property or not...

Comment #20

Something doesn't have to be tangible DNQ for it to be taxed. Utility services are taxed, services like automobile repair services, heck even 'airport taxes' just for buying a ticket. EXACTLY..

Comment #21

That is the point I am trying to make, I guess I'm not presenting properly. As long as we stay under the radar of the government, they will leave us alone (hopefully). We all know utilities, we all know car repair, not everyone knows about domains and I want to keep it that way. So if people keep pushing for domains to be real property (or the perception of real property), someone may tax notice that a huge sale was not taxed, that's all I'm trying to say.

As far as capital gains, if I sell my car for more than I bought it, I have to pay gains on it and the person has to pay taxes on the purchase (double taxation), I don't want that for domains...

Comment #22

This is simply not true. I bought my TV from a store and I did not pay tax on it. The store I bought it from did not pay any taxes on it. The company that imported the TV and sold it to the store didn't pay any taxes on it. Heck, the factory that made it probably didn't even pay any taxes on it because it was for export. Thanks for sharing, although I don't see the relevance.

But it's always reassuring to hear that I'm getting a better deal than someone else Nothing makes me say that. In fact I didn't say it..

All I have said is that not all property is taxed and not all things with are not property are untaxed. That's my whole point. The issue of whether a name is considered property is largely irrelevant as to whether it is taxed or not.

If some government wants to try to tax domain names they're welcome to it. They won't even have to classify names a property, just make a law saying you have to pay tax. But it won't affect me in the slightest because I will simply see to it that transactions are done in one of the myriad of other jurisdictions that don't have such silly laws. (Nowhere).

There is no central registry. There's a collection of root servers located in many places around the world which provide pointers to the root servers for all the TLDs.

As for being tax happy you might want to read up on the law. It's been largely illegal to tax the Internet since 1998. Oh. So they are property after all? Glad we finally got that sorted out..

Comment #23

Well, I dunno about the US but in the UK (and I must concur with DNQ) you pay value added tax on everything you buy (with certain exceptions noted above like food, clothing etc).. The only person however to actually pay the tax is the consumer, for every other link in the purchasing chain, from manufacturer to re-seller, claims back the tax..

Now, to use examples as given, you buy a TV from a store, you pay tax - this may not be shown on the sales receipt, but trust me, YOU PAY TAX...

Now the point about the internet and tax is very complex and very difficult to police [im sure here Prima can call on his domain police]. However, you buy and sell domains, you get paid from foreign sources, whatever country you are in (and if you are unlucky to receive a tax audit) the evidence against you (if you choose to declare the income showing in your bank account as repayment of a loan (or other such ficticious story)) is very hard to prove to the contrary..

I read an article recently by the UK inland revenue that billions per year are being lost in tax through the likes of ebay sales etc and the seller being untraceable... Now this has been going on for years, you wash someones car as a kid, you babysit for someone, you hold a garage sale etc etc - these are all incomes which should be taxable - but who declares them...? No-one, thats who... The internet has changed this, it's now big business and billions are being wiped from the central coffers as a result... Im sure they will get round to putting pressure on bodies such as sedo etc in due course but their problem is and always will be the fact that you are dealing with just so many different countries and jurisdictions - at the mo, it's nigh on impossible...


Comment #24

Primacomputer where are you from because it's most likely not the USA...and DNQ...if you buy a domain for $8 and sell it for $500 then you are suppose to be paying tax on that..I ain't judging you if you don't just saying that under the current laws income is income no matter WHERE it's from.

Also DNQ I get your point now...saying that if domains are viewed as property that taxing it will surely follow...and I agree 100%...

Comment #25

I'm from the US. That's just not where I live, and not where I bought my TV.

But it could have been. I can ring up a shop in the US and ask them to send me a TV. They'll ask me if I'm in the same state as they are and they'll happily charge me zero sales tax if I'm not. Or I could travel to Europe to buy my TV in and simply hand in the receipts to customs when I leave and receive a refund of my VAT. Or I could just live in a place that chooses not to put local businesses at a disadvantage by taxing their sales and shop locally.

So much property, so few taxes. This unbreakable link between property and tax simply does not exist. How clear or self evident such a link might be to to anyone is irrelevant.

As a business I buy and sell tangible property, intangible property, services and domain names all the time. For tax purposes they are all treated the same. I don't pay a cent in tax on any of them. I pay tax on any profit I make which is subject to profits tax in the appropriate jurisdictions; on services, tangible property or anything else I trade...

Comment #26

I have nothing new to really add, but if I remember correctly, there was a bill proposed in hte US to start taxing internet sales. It was shot down for now, but as the internet grows more, it will be revisited.

"if you buy a domain for $8 and sell it for $500 then you are suppose to be paying tax on that..I ain't judging you if you don't just saying that under the current laws income is income no matter WHERE it's from.".

I'm not quite following this, I buy and sell through my business, so all sales are revenue and I am taxed on profits at the end of the year. If you don't have a business, you should be claiming capital gains...

Comment #27

If you bought and sold intangible property or services as part of your business would you still pay tax on the profits?..

Comment #28

In the USA, a business has to pay taxes on any profit. How "profit" is figured is a vastly complicated procedure, but yes, taxes must be paid on profits...

Comment #29

Profit is not 'vastly complicated...

Income - Expenses = Profit.

Now measuring all your 'expenses' and 'income' can be as simple or complex as you want it. There are many different accounting methods which can be used...

Comment #30

Here is the British angle on Domainnames and taxes-interesting read.

Comment #31

Exactly, and the same goes for basically every other jurisdiction in the world.

As far as I'm concerned this is pretty straight forward but there's this domainers urban legend that says that if domains are considered property we will have to pay tax on them. Profit tax was brought up as one potential tax on domains. But as you have correctly observed, whether something is property or a service is irrelevant to whether it's subject to profit tax...

Comment #32

And yet, last night you posted So, which is it? Is it "straightforward" or do you have any idea what you're actually asking?..

Comment #33

Ahhh, hold on one gad darn minute there folks..... It appears two issues are to the fore and being argued against in the old oranges Vs apples debate...

No VAT (sales tax) is payable on foreign/across country/state whatever sales (prima is correct). As an individual however, You WILL be liable for capital gains tax on the profit you make from selling anything.. And depending upon your circumstances and or country of residence this can be some serious bucks and also irrelevant when the person you sold said item to lives in Kuala Lumpar...

"Value added Tax" and "Capital gains tax" - Two completely different beasts - Though both designed to fleece the maximum amount of your money from you.....

Comment #34

It's really very straight forward. I was simply asking someone who claimed that domain names would be taxed if they were considered property whether this particular tax would be levied for things that were intangible property or services.

I'm trying to get people to think critically and question things they simply believe without knowing why. I'm doing this by asking a question that I know the answer to but which points out holes in their logic...

Comment #35

Prima, I don't you are understanding my point with taxes. We all know aobut taxing profits and capital gains. My point is, what if domains are treated like real property and the government says, hey, all property is subject to a sales tax.. this would be paid by the buyer, nopt the seller, but the seller still has to pay the appropriate tax on profits, that is my point...

Comment #36

I understand what you're saying. I'm just pointing out how it doesn't work that way.

Sales tax is not some unified tax, and certainly not international. Each state levies different taxes on different things. Some states tax one item, others do not. As a general sales/ value added/ good and services tax is not collected when you buy from another state/jurisdiction.

Many states collect sales tax on services. Domains are currently considered a service. This is by contract and by law to some degreeregardless of what any forum members (including myself) think they should be considered to be. There is nothing (aside from perhaps the Internet Tax Moratorium) stopping any state from collecting sales tax on domain names or any other service.

Sales tax is generally not levied on real property. There are separate taxes for that. If domain names were considered real property there would almost certainly be no sales tax on them.

In short, domains will not automatically be subject to sales tax if they are considered property, nor will they be permanently safe from sales tax if they continue to be considered a service.

There are plenty of valid tax issues that do come up depending on how names are classified. It's a shame we're getting hung up on this sales tax thing which is a non-issue...

Comment #37

Property can be owned in terms of time shared. Also in china, the ownership of a property is only 70 years. Even if you own one year, it is still a property...

Comment #38

Ok prima, I give up. I am merely using sales tax as an example. I will make my viewpoint very general now. If domains are specifically classified (which it is not now), the government may be more apt to find a way to get money from resale from the domains. Right now, nobody really knows how domains are classified (there is no code stating specifically what domains are), but rest assured, if there is code which clearly defines a certain product or service, it is easier for the government to find a way to get their greedy hands on more money. That is my only point.

The government has looked into taxing interstate internet transactions and they will revisit it again...

Comment #39

If you want to be very general with terms like specifically classified, the government and code then any conclusions you make based on those are equally hollow.

I don't see why you now claim that no one knows how domains are classified. You have already agreed numerous that domains are a service. Read the fine print next to the I agree tick box next time you register a domain.

Google for NSI v. Umbro to read about about a Judge who also agrees...

Comment #40

I think he means no one knows how domains WILL be classified in the future. There are still imho going to be suits over their status and their definitions...

Comment #41

This question was taken from a support group/message board and re-posted here so others can learn from it.


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