C|NET: The Tax Man Cometh After iTunes

[Jason Dunn]

<div class='os_post_top_link'><a href='http://news.com.com/The+tax+man+cometh+after+iTunes/2009-1022-6059914.html?part=dht&tag=nl.e703' target='_blank'>http://news.com.com/The+tax+man+cometh+after+iTunes/2009-1022-6059914.html?part=dht&tag=nl.e703</a><br /><br /></div><i>"Internet shoppers accustomed to tax-free purchases from Apple Computer's iTunes Music Store soon may be in for an unpleasant surprise. State legislatures and tax officials, eager to find new ways to boost government spending and curb budget shortfalls, are eyeing the burgeoning market for digital downloads as a potentially lucrative source of revenue. A CNET News.com analysis shows that 15 states and the District of Columbia now tax downloads of music, movies and electronic books. Some high-tax states such as California do not levy the same charge on iTunes downloads, but that could soon change. "More states are beginning to tax downloaded products," said Steve Krantz of the Council on State Taxation, which represents companies that do business in many states. "Some are doing it through specific legislation. Others are doing it through the interpretation of previous law.""</i><br /><br />An interesting, if not unexpected development. Has anyone noticed that they were paying tax on their iTunes downloads, or any other type of song purchasing system?

[jmulder]

Yep, I noticed the sales tax on my iTunes purchases here in Colorado. I moved here from a state with no sales tax, so I'm generally sensitive to it's existence.

I've also found it interesting that Gateway and Apple charge sales tax over the internet, but Dell (so far) only charges for services that will be provided here, such as onsite support. Granted, both Gateway and Apple have a physical presence here in BestBuy and CompUSA, while Dell has no physical presence here.

[Outlaw94]

Its the perfect thing to do. :roll: Just when legal downloads are starting to take off with everyone and some in the recording industry realize that if they price their contect reasonable and make it available in an electronic file people will purchase legally and not just head to Kazaa, Limewire or Bittorrent.

Then the government steps in and says they want their share, subsequently raising the price and attracting fewer people to the legal way of obtaining music. Brilliant.

I just love the infinite wisdom of our friends in public office.

[jmulder]

My curiosity was piqued and so I did a quick google on internet sales tax in Colorado and found that if a seller does not collect sales tax, purchasers are expected to pay 2.9% 'use tax' directly to the State of Colorado.

http://www.revenue.state.co.us/fyi/html/sales79.html

Obviously, your mileage may vary depending on your state of residence.