Downloading music, movies, e-books and Apps could soon cost Connecticut residents more as lawmakers consider a tax on digital downloads.
The bill, proposed by the General Assembly‚Äôs Finance, Review and Bonding Committee, would have consumers pay the 6.35% sales tax on any electronic transfer.
Supporters say the bill would level the playing field for brick-and-mortar retailers in the state who are already required to charge Connecticut sales tax to consumers who purchase these products in their stores.
About 25 states around the country have already begun taxing digital downloads.
It‚Äôs that last sentence that surprised us. Really, NBC? This already exists in 25 states? I‚Äôm surprised I haven‚Äôt heard more about it.
About.com confirms that as of January 26, 2012, there were 23 states with such taxes, but continues:
If your state made the list you may or may not see a sales tax charge when you download digital products because many online retailers will not have to collect taxes in every state that taxes digital downloads. This is because of a legal concept called nexus, which generally says that a state can only tax businesses that have a physical presence in the state (although each state defines ‚Äúphysical presence‚ÄĚ differently). So, even though a state law may require retailers to charge sales tax on digital products, iTunes, Amazon, and other online retailers are only required to collect and remit sales taxes in states where they have nexus.
Consumers are, however, still liable for the taxes. Most state income tax returns will ask consumers to report and pay taxes on items they bought online, including downloads in states where they are taxable. Whether or not people will actually do this, is another story.
Wow. The more such laws government creates, the more criminals they create. The more criminals they create, the more power they have.