Taxing “Digital Goods & Services”
Every day, more and more American consumers just like you are going online to purchase and download “digital goods & services” – such as apps, music and ringtone downloads, also e-books and video games – and that consumer trend hasn’t gone unnoticed by state, city and local politicians looking to impose new taxes because they are desperate for new revenue sources.
In their haste to collect more money from your pocketbook and balance their budgets, paying for unrelated government projects, nothing has yet been done to protect the consumer, and to ensure the purchase and download of digital goods and services won’t be subject to multiple and discriminatory levels of taxation. With the way things currently stand in terms of taxing telecommunications services, you could potentially be double - or even triple-taxed on an mp3 or the latest incredible app.
There is, however, a glimmer of hope coming from Washington, D.C. The U.S. Congress is currently considering federal legislation that would establish a national framework for how digital goods and services should be fairly taxed at the state and local levels.
- H.R. 5649, or “The Digital Goods and Services Tax Fairness Act of 2010,” was a recently introduced bipartisan bill that would make sure consumers aren’t burdened by multiple and discriminatory taxes on digital commerce.
- The legislation would clearly establish which jurisdiction has the right to tax digital transactions – solely left to the jurisdiction of your home mailing and billing address – and tell all others – hands off!
- Congress has a clearly defined role to act in all tax matters that impact interstate and international commerce – particularly when such transactions are highly susceptible to multiple and discriminatory taxation – which is clearly the case with digital goods/services that are sold over global networks crossing numerous state boundaries.
- Failure to establish a national framework for these digital purchases will allow this confusing, messy patchwork of different state and local tax laws to expand to and burden digital commerce – that’s immensely unfair to consumers, and in this fast-paced digital age you need to be clear about what (and to whom) you are paying taxes to support the cost of government services.
As of 2010, 13 states have expanded their sales tax statutes to specifically include digital goods & services in their tax base (Indiana, Kentucky, Mississippi, Nebraska, New Jersey, North Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, Wisconsin, Wyoming). Many more have considered similar proposals. With state and local budgets still struggling, and the political season of elections almost over, 2011 will undoubtedly see even more states seek to enact this same policy.
Take Action Now! Tell your representative to support clarity in taxation for consumers and co-sponsor H.R. 5649 today.
Wirelessly downloading your favorite apps, songs, games, ringtones, e-books or preferred gps navigation system has never been easier while you’re on-the-go. MyWireless.org wants to help you make sure that no matter where you live, understanding exactly what state and local authority is taxing these goods and services is just as easy – and more importantly, that you are only paying taxes on these goods and services once!