Colorado (HB 1192), Indiana (SB 250), Wyoming (HB 29) have legislation, and Vermont has a draft tax bill that would impose new sales taxes on digital downloads.
States are looking everywhere for new revenue, but it doesn’t make sense to add taxes to digital downloads, the greenest way you can get music, movies, books, games, and software. Instead, states should be encouraging behavior that avoids round trips in the car, warehousing, and the use of plastic and packaging.
Moreover, some state tax administrators wrongly contend that digital goods are the equivalents of offline products. Just ask the Kindle users whose books were ‘recalled’ by Amazon.
Finally, these bills place in-state businesses at a disadvantage to out-of-state competitors, who wouldn’t have to collect the sales tax when selling the same downloads to in-state customers.
NetChoice posts on this topic:
[1]Emphasis added.
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