Earlier today, the House Judiciary Committee approved the ‘Digital Goods and Services Tax Fairness Act’ (H.R. 1643), paving the way for a House floor vote on the bill. We thank the Representatives Lamar Smith and Steve Cohen for sponsoring this legislation, and the House Judiciary Committee members for making this positive first step.
At the markup, House Judiciary Committee Chairman Bob Goodlatte said:
Unlike a physical purchase from a brick and mortar store, digital goods transactions can involve multiple jurisdictions simultaneously. Consider a Virginia resident downloading a movie from Washington-based Amazon while waiting at Chicago O’Hare Airport in Illinois. Three states could potentially lay claim to that transaction, creating a real risk of multiple taxation for the consumer. The Digital Goods legislation provides a consistent, uniform sourcing framework to address this problem.
As Chairman Goodlatte pointed out, right now consumers could be taxed by several different jurisdictions for the same digital goods purchase. With state and local governments desperate for new revenue sources, that scenario is quite possible, and there’s currently no law in place to keep that from happening. That’s why it’s important to make sure wireless consumers are treated fairly and that we have a “national framework” or some “rules of the road” for how the digital marketplace is fairly taxed at the state and local levels.
There is still much work to be done to make digital goods tax fairness a reality. The House must now pass the ‘Digital Goods and Services Tax Fairness Act,’ and the Senate needs to act quickly on the companion bill (S. 851) with the same name.
Contact your Representative and Senators today and tell them to pass this much needed legislation!
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