The Wyoming House Revenue Committee heard testimony February 15 on HB 29, which would tax “specified digital products,” including music, movies and digital books.
Stephen Kranz testified that the bill would have a detrimental impact on Wyoming’s economy and its ability to attract high-technology businesses.
The bill harms existing in-state businesses by subjecting them to a collection requirement that is not imposed on out-of-state companies. HB 29 would only impose sales and use tax collection requirements on Wyoming companies selling to Wyoming customers. Wyoming consumers will be incentivized to purchase digital products from companies located outside the state – and thus cannot be required to collect the state’s tax. Thus, HB 29 would punish companies located here and reward companies located outside the state.
The Vermont Ways and Means Committee heard testimony February 11 on legislation proposed by the Tax Department to expand the taxation of digital goods.
Last year, the legislature adopted a new tax on “specified digital products” by overriding the Governor’s veto of the budget bill. Specified digital products are a narrowly defined set of digital goods that include ringtones for cell phones and digital downloads of books, videos, and music. The new language proposed by the Tax Department would impose the tax on “products transferred electronically that would be taxable if delivered on tangible storage media...”
Forty-eight states dealt with or continue to face budget deficits totaling $165 billion, which constitutes approximately one-quarter of all state budgets. Thirty-three states already project budget deficits for 2011. To replace lost tax revenue, many states have enacted or are considering new sales and use taxes on transactions involving digital goods. Although the proponents of such legislation argue that taxes on digital goods would promote a more fair and equitable tax system by taxing substantively similar items regardless of the method of delivery, the impetus of digital goods tax legislation is ultimately to raise revenue.
As states search for new streams of revenue to solve their budget problems, the technical and policy implications of taxing digital products and services should be carefully considered. Download taxes:
Virginia Democrat Rick Boucher and Texas Republican Lamar Smith have introduced the Digital Goods and Services Tax Fairness Act of 2010 which would make it extremely difficult for states to levy taxes on goods and services purchased over the Web. The Boucher-Smith bill would impede the taxing of digital goods because it would force state legislatures to hold up or down votes every time a state agency attempted to tax anything sold via the Internet.
Read More at NetworkWorld
South Carolina's Tax Realignment Commission is recommending that the state for the first time charge sales taxes on digital purchases from online stores including iTunes and Amazon.com. The commission's proposal is the latest in a series of changes lawmakers have made to the system of tax collections, and represent a reversal of recent legislative philosophies. However, no changes will happen unless the Legislature approves them.
Read more at The Post and Courier
Currently, some 23 states and the District of Columbia levy sales taxes in one form or another on e-books, music, apps, ringtones, and other digital downloads. However, a new proposal in the U.S. Congress titled the Digital Goods and Services Tax Fairness Act, is designed to ensure that these"iTaxes" which have popped up all over the country in the last three years do not single out the digital marketplace with excessive or discriminatory taxes. The bill, sponsored by Congressmen Rick Boucher (D-VA) and Lamar Smith (R-TX.), is part of a broader effort by technology firms and telecommunications providers to push back against what they view as tax agencies that are unreasonably singling out electronic purchases with unfair, expensive, and confusing rules.
Read more at CNET news
Do you think it’s fair to be taxed when you buy music, games, applications, or other downloaded products and services on the Internet? States are facing real budget crises, but so are consumers. Today, the threat of download taxes has never been greater. SIGN THE PETITION TODAY and help keep Internet commerce free from taxation.