IMO the way to fix this would be to either give a $5 rebate to digital downloaders only or waive the $5 requirement to upgrade to the box and just require S&H. If both versions are "Collector's Edition", then there shouldn't be another $5 required, right?
Digital download is necessary for people not able to acquire the retail version, but people that don't know better are getting confused.'
I went with the digital download because I'm impatient and don't want to pay sales tax.
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You are required to put down online purchases on your income tax form, not doing so is viewed by the IRS as tax evasion. The reason that you won't get sales tax on online purchases out of your state is usually because of this. They may not go after you for doing it but it's technically illegal.