States want to tax iTunes, other digital downloads

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NetChoice, a "coalition of trade associations" including Yahoo, VeriSign, and eBay — and which I take from its K Street address in D.C. to be a lobbying group — is taking a clever tack to steer state governments from implementing a tax on digital media downloads: cloak downloads in green.

From The Iconoclast:

"With global warming and a world that's running out of oil, the last thing governments should do is add taxes on something that uses no oil and produces no carbon," said Steve DelBianco, executive director of NetChoice. "A digital download is the greenest way to buy music, movies, and software, since it requires no driving to the store, no delivery vans, and no plastics or packaging."

Works for me, if only because I have no desire to pay any additional sales tax, an opinion bolstered by only personal parsimony.

If you'll pardon anecdote masked as data, I will say this: ever since New York State started charging sales tax on Amazon purchases I've made considerably fewer transactions with Amazon. Perhaps that's a good thing in the end.

States may tax iTunes, other digital downloads [The Iconoclast]

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12 Comments

  1. As I’m pretty sure we the people aren’t being represented any longer that’s probably an appropriate picture.

  2. Taxes should be the same for everyone. If digital downloads require no plastics or packaging then this should already make them cheaper than physical goods, without the need for additional tax advantages.

  3. Interestingly, the article points out at the very end that New York explicitly does not impose tax on the sale of digital content, as it is “intangible property”, thus not subject to sales or use tax. I actually haven’t bought anything from Amazon since they started charging sales tax; do they add tax to their MP3 downloads? ‘Cuz if I’m reading this right, that’s illegal under NY State law.

  4. I’m all for necessary taxes, but I’ll be fine with excise and luxury taxes generating extra revenue thank-you-very-much.

  5. “A digital download is the greenest way to buy music, movies, and software, since it requires no driving to the store, no delivery vans, and no plastics or packaging.”

    (Not the greenest but anyway)
    this is exactly the problem with downloads:
    the state is not collecting tax money when you are supposed to pay your car tax, insurance, oil tax to be able to buy your goods.
    If you don’t do so you are an useless citizen for the politicians and the big powers…
    Never forget that with cars we re all paying a tax for the freedom to go where we want and to buy what we want…

  6. “Servers run on magic pixie dust now?”

    …Most of the Linux geeks I know claim they do. It’s how they keep employed from what I gather.

  7. Anybody who pays $.99 for between 2 and 7 MB of data deserves to be taxed and crippled by DRM. What is there exactly to tax? If all the servers were set up in Oregon (no sales tax) then would I have to pay tax in Wisconsin? It’s stupid.

  8. And anybody who creates stuff and makes it available for free deserves to go broke, NYAH! Seriously, every state in the union is always on the lookout for sources of revenue; I think a lot of them would define the point of sale as being whatever computer you’re using to buy the content, rather than its server of origin, wherever it may be…and therefore justify the sales tax. Not that it’s right, and like I pointed out earlier, the great state of New York claims it’s completely off the table (for digital content, anyway).

  9. The funny thing is, you don’t normally pay sales tax on mail-order stuff unless you’re buying it in the same state/province/whatever as it’s being sold from. Not sure why this would be any differant.

  10. Oddly the first thing I thought of this is a silver lining: a decision whether or not to tax such transactions could potentially force a legal precedent to clip the industry’s wings and prevent their Schrodinger’s-purchase system of “sale when we want it to be, license when we don’t”… a flight of fancy which has, er, flown in the face of logic and law for altogether too long now.

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