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A new tax gambit: Tax collectors start eyeing iTunes and download taxes


States seek levies on digital-media downloads
April 13, 2006 4:00 AM PDT

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." [...]

New Jersey Gov. Jon Corzine, a Democrat, proposed in his budget that 
"downloaded music and videos" be taxed starting Oct. 1. The state tax 
agency expects legislation to be introduced in June.

[...remainder snipped...]

Posted by Declan McCullagh on Apr 13, 2006 in category economics

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