New taxes for taxing times?
Because of quirks in many state laws, sales taxes may be levied on CDs sold in storefronts but not on iTunes and other digital downloads. This is the situation that recession-weary, tax-hungry politicians are hoping to change.
Mississippi is one of the latest states to write into law a tax on digital products. The measure, which was adopted mid-March and goes into effect July 1, imposes a sale and use tax on specified digital products–including digital audio-visual works such as movies, digital audio works such as ringtones, and digital books. Republican Gov. Haley Barbour endorsed the legislation via Twitter. “On HB 1461, I support this bill and here’s why: This bill will treat Internet sales like catalog sales making it a level playing field,” he said on March 11. Including Mississippi, at least 18 states claim they have the authority to collect taxes on digital goods, and more are likely to join them.
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