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iTunes Plus Tax: More States Closing In on Download Taxes

Wednesday, August 13, 2008
by  alexandra

Downtimes are difficult for local governments, and frequently a motivator for extra taxes and higher ticketing.  Online, the ecommerce goldmine is difficult for municipalities and state governments to resist, a pot that also includes music downloads.  According to a recent C|Net report on the matter, at least nine states have considered digital download taxes, and five have passed digital taxation plans into law for near-term implementation.

That includes Indiana, South Dakota, Utah, Nebraska, and Indiana. Others are attempting to push past older laws that inadvertently give digital retailers a free pass.  "Because most state tax laws were written long before the internet existed, they may accidentally immunize downloads from taxation," the report noted.  Additionally, it becomes incredibly difficult to define state boundaries on internet sales, an inherently borderless endeavor.

The moves are being challenged by numerous digital outlets, in part because of their eco-friendly, energy-friendly footprint.  "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," Steve DelBianco, executive director of NetChoice told C|Net.



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