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Tue 01 Sept 17:46 UTC
Open Source6 min read

AnkiDroid's 578-Point Fight Turns on Google's Meaning of Tax-Exempt

Google rejected AnkiDroid updates over an Open Collective link. The dispute turns on whether a 501(c)(6) host qualifies for Play's tax-exempt donation exception.

At 13:30 UTC on September 1, a plea about one donation link had reached 578 points and 152 comments on Hacker News. The code change facing AnkiDroid is small: remove the link from its Google Play build. The cost is harder to measure. A volunteer-run app with more than 10 million Play downloads must make its only stated funding channel less visible inside the store used by most of its audience, or risk removal in most countries on September 11.

AnkiDroid's maintainers laid out the case in a public GitHub issue on August 29. They say Google began rejecting updates on August 28 because the app links to its donation page on Open Collective. After an appeal and several rounds of email, the team decided to remove donation links from the Play Store build in the 2.24.x line. It is doing so under protest to keep distributing the app.

The Hacker News score measures developer attention; it does not confirm AnkiDroid's reading of the rule. The record available here consists of the policy Google publishes and the support messages reproduced in the project's GitHub issue. Together, those documents leave one term unresolved: what Google means by a tax-exempt donation.

One phrase carries the whole dispute

Google's Play payments policy normally requires Play Billing for app downloads and purchases of digital features or services. Section 3 carves out several categories for which Play Billing must not be used. One of them is "tax exempt donations." Section 4 then bars apps, outside listed exceptions, from steering users to another payment method through links, buttons, messages or other in-app flows.

AnkiDroid does not sell a feature through the link. According to the maintainers' account, the app is free, nothing is sold inside it and contributions go to Open Source Collective, its fiscal host. Google initially told the team to provide documentation if the donation recipient was tax-exempt. Open Source Collective supplied an IRS determination letter showing exemption under section 501(c)(6), and AnkiDroid sent it to Google on July 21.

The correspondence posted by AnkiDroid introduced a narrower example. On August 6, Google support wrote that donations could be collected when they were for a validated tax-exempt organization, "for example" a US 501(c)(3) charity or a local equivalent, and passed through a secure payment system. The maintainers replied that their 501(c)(6) host met the stated condition. Google's next answer said the receiving organization was not tax-exempt, but did not explain why the IRS letter was insufficient.

That exchange runs into a real distinction in US tax language. The Internal Revenue Service says contributions to a 501(c)(6) organization are generally not deductible as charitable contributions on a donor's federal return. The organization itself can still be exempt from federal income tax. Open Source Collective identifies itself as a US 501(c)(6) nonprofit and publishes its employer identification number.

Read together, the documents suggest a terminology collision. "Tax-exempt organization" describes the recipient's status; "tax-deductible contribution" describes the donor's treatment. AnkiDroid argues that Google's published policy uses the former concept. The page does not define the phrase or say that only 501(c)(3) recipients qualify. The support emails use a 501(c)(3) as an example, then reject the 501(c)(6) letter without supplying the missing rule. The record identifies the ambiguity but not the reason for rejection.

The practical answer is a Play-specific build

AnkiDroid tried to move forward while the appeal remained open. Its published timeline says version 2.25.0 alpha 3 was submitted on August 27 and rejected the next day. Google's notice identified the in-app experience and instructed the developer to remove links leading to payment methods outside Play Billing. A second notice set September 11 as the deadline, after which the app could remain available in India and Russia but would be removed from Google Play elsewhere.

To preserve distribution, the team chose to strip the donation link from the Play Store build. That choice matters because Google Play currently lists AnkiDroid at more than 10 million downloads, with roughly 164,000 reviews and a 4.8 rating. The existing listing remains live, and the rejection notice said an older version could continue to be published. This is a deadline for a compliant update, rather than evidence that Google has already removed the app.

Google's policy also allows enrolled developers in eligible markets to use alternative billing or send users outside an app under specific programs. The correspondence pointed AnkiDroid toward an external-links program for US users. That does not settle a worldwide release, and it does not answer why the tax exemption letter failed. Maintaining regional payment flows would turn a donate button into distribution-specific policy work. The project has prioritized keeping the main Play channel open.

Removing a link does not stop supporters from finding the project elsewhere. It does remove the prompt at the moment when an active user is already inside the app. AnkiDroid's issue says its Open Collective is its sole source of funding for maintenance and development, so discovery is part of the funding system even when the transaction happens on the web. The loss here is access to that prompt, not a Google fee on the donations.

A fiscal host sits between the app and the donor

Open Source Collective gives open-source projects financial and legal infrastructure without requiring every maintainer group to create its own entity. Its site says it handles accounting, taxes, contracts and expense processing for thousands of projects. Projects collect money through Open Collective, while the fiscal host receives and administers it.

That structure explains why AnkiDroid handed Google a determination letter bearing its host's status. The project's public ledger names Open Source Collective as fiscal host and says funds pay contributors for maintenance and feature development. On September 1, the page showed a balance of about $76,296, total receipts near $207,980 and an estimated annual budget of roughly $70,046. The page identifies the recipient and makes incoming payments and expenses visible.

The case does not automatically put every hosted project at risk. Google's published rule applies to a particular app flow, while its payment programs vary by market. The case does expose a repeatable question for an open-source Android app funded through a 501(c)(6) fiscal host: whether Play's donation exception follows the host's tax-exempt status or requires the donor-facing deductibility associated with many 501(c)(3) charities. The policy does not give a developer enough detail to answer that before review.

For maintainers, that uncertainty becomes release work. AnkiDroid is preparing a Play-specific build, while Google's policy directs eligible developers toward enrolled payment or external-link programs that vary by market. Those paths can require separate code and extra appeal evidence. None of that improves the application. It is compliance code and release overhead created by a classification that the policy states in four words. AnkiDroid had enough attention to turn the problem into a 578-point discussion; a smaller project could face the same review through a private Play Console notice.

September 11 is the next concrete test

AnkiDroid has asked Google to say whether a 501(c)(6) determination satisfies the donation exception, and it has specifically told readers not to contact Google support on its behalf. The immediate test is narrower: whether Google accepts the 2.24.x Play build after the donation links are removed. Approval would preserve distribution while leaving the funding question unanswered.

A written definition in the public payments policy, or a support response that addresses the IRS status directly, would resolve the classification. Until then, the GitHub issue will show whether Google approves the stripped-down build before September 11. The app's listing is still live; the unresolved part is whether open-source projects with this fiscal-host structure can mention their funding inside it.

Sources

  1. AnkiDroid: Google Play no longer allowing our Open Collective donation link
  2. Google Play Payments policy
  3. IRS: Tax treatment of donations to 501(c)(6) organizations
  4. Open Source Collective
  5. AnkiDroid on Open Collective
  6. AnkiDroid Flashcards on Google Play
  7. AnkiDroid discussion on Hacker News