The Industry

Why Did Spotify Tell D.C. Customers That They’d Have to Pay Iowa Taxes?

Spotify logo.
Someone at Spotify may have mixed up D.C. and Iowa’s ZIP codes. Lionel Bonaventure/AFP/Getty Images

On Monday afternoon, Spotify subscribers in D.C. began receiving emails from the company announcing that their fees would be rising due to a new sales tax—in Iowa.

Spotify email notifying customer of sales tax.
Screen grab of a Spotify sales tax email.

Users soon began asking the obvious question: Why would D.C. customers of a company with a U.S. headquarters in New York City have to pay an Iowa tax?

There’s likely a simple explanation: a typo. As the popular D.C.-area blog Popville theorized in a post about the confusion, ZIP codes in D.C. begin with 200**, while those in Iowa begin with 500**. The likely culprit in this scenario is a Spotify employee or software glitch that accidentally targeted D.C. subscribers with an email intended for those from Iowa. It’s also possible that the D.C. customer email list was mixed up with the Iowa one.

This theory was bolstered by reports from Iowa subscribers, who say that they received fee increase emails referencing D.C. taxes.

In June, the Supreme Court upheld South Dakota legislation that imposes sales taxes on online retailers even if they don’t have a physical presence in the state. This paved the way for both Iowa and D.C. to impose similar taxes on users of companies like Spotify, Netflix, and Wayfair.

Spotify has not publicly admitted to a ZIP code snafu (or responded to Slate’s request for comment), but some Twitter users have said that the company’s customer service department has been sending private messages clarifying the situation.