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Music Downloads Taxable in 15 States...

Zim Hosein

Zim Hosein

Super Moderator | Elite Member
Super Moderator
April 13, 2006 -- This year Apple celebrated the one billionth music download from its industry-dominant iTunes online music store.

The service allows audiophiles to pick from thousands of individual songs and albums for 99 cents a song ? tax free, right?

Not so fast. In 15 states plus Washington, D.C., those iTunes' downloads are taxable.

Come Tax Day, filers are supposed to claim them under something called a use tax, which is applied to out-of-state purchases.

Tax collectors haven't bothered enforcing the use tax because, until recently, digital sales were just a sliver of the real sales made in record stores.

But in 2005, online music downloads generated about $1 billion, and states are looking for ways to increase revenue by taxing services like iTunes.
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News to me! 😕
 
Originally posted by: xtknight
Originally posted by: CrackRabbit
So when do we reach the point when we have another Boston Tea Party?
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Yes, time to pour all those MP3s in the bit bucket!
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Think about it for a second. It isn't just about music downloads, you are taxed in one form or another on almost everything you do or buy. At what point to people say enough is enough, you can't have any more.
 
Originally posted by: CrackRabbit
Think about it for a second. It isn't just about music downloads, you are taxed in one form or another on almost everything you do or buy. At what point to people say enough is enough, you can't have any more.
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What good would it do? You would be labeled a criminal and the State would arrest you and punish you. Politicians don't care about the people or the country, they only care about keeping their jobs and gettings as much money from you as possible because they feel they are better equiped to decide how it is spent than you are. Without money to throw around politicians are truly powerless. Ever notice that whenever fault is found in a program or endeavor their response is that more money needs to be spent rather than investigating if the money already being spent is being done so in an efficient manner? They don't care becuase they are spending YOUR money and buying their power with it from YOU.....kind of a funny paradox isn't it?

 
Originally posted by: Ronstang
Originally posted by: CrackRabbit
Think about it for a second. It isn't just about music downloads, you are taxed in one form or another on almost everything you do or buy. At what point to people say enough is enough, you can't have any more.
Click to expand...

What good would it do? You would be labeled a criminal and the State would arrest you and punish you. Politicians don't care about the people or the country, they only care about keeping their jobs and gettings as much money from you as possible because they feel they are better equiped to decide how it is spent than you are. Without money to throw around politicians are truly powerless. Ever notice that whenever fault is found in a program or endeavor their response is that more money needs to be spent rather than investigating if the money already being spent is being done so in an efficient manner? They don't care becuase they are spending YOUR money and buying their power with it from YOU.....kind of a funny paradox isn't it?
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Yes and a rather sad one at that.

 
The use tax is nothing new. Every state with a sales tax has one for the consumption of goods in the state(what qualifies varies). The problem is enforcement since out of state companies are not required to file papers to the state with the item was shipped(unless they have offices there than the goods at subject to sales tax) It is mainly used againts business because it is eaiser to track their out of state purcahses (expecially when they write them off as expenses).

It will be interesting to see how the states collect on this.
 
Originally posted by: Ronstang

What good would it do? You would be labeled a criminal and the State would arrest you and punish you. Politicians don't care about the people or the country, they only care about keeping their jobs and gettings as much money from you as possible because they feel they are better equiped to decide how it is spent than you are. Without money to throw around politicians are truly powerless. Ever notice that whenever fault is found in a program or endeavor their response is that more money needs to be spent rather than investigating if the money already being spent is being done so in an efficient manner? They don't care becuase they are spending YOUR money and buying their power with it from YOU.....kind of a funny paradox isn't it?
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If our founding fathers were alive today it would hit the fan hard.

 
Originally posted by: DaWhim
I do most of my big purchases online just to avoid the friiking sale taxes.
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Which is exactly why they're pulling things like this. If people hadn't freaked out and started buying anything and everything online, the numbers would've increased more slowly and we would've had a few more years before getting screwed.
 
Originally posted by: YoshiSato
The use tax is nothing new. Every state with a sales tax has one for the consumption of goods in the state(what qualifies varies). The problem is enforcement since out of state companies are not required to file papers to the state with the item was shipped(unless they have offices there than the goods at subject to sales tax) It is mainly used againts business because it is eaiser to track their out of state purcahses (expecially when they write them off as expenses).

It will be interesting to see how the states collect on this.
Click to expand...

Indeed; people living in states with sales tax who buy things in states without sales tax (e.g., a CA resident like me buying things in OR) are supposed to pay use taxes to their home states, but enforcement seems lax.

Then again, collection of the music download tax could be implemented with music downloads simply by having the download client look at a user's billing address to determine the tax rate, much like how an online vendor like Newegg would look at my address to determine that I need to pay 8% or so in sales tax.
 
Originally posted by: ts3433
Originally posted by: YoshiSato
The use tax is nothing new. Every state with a sales tax has one for the consumption of goods in the state(what qualifies varies). The problem is enforcement since out of state companies are not required to file papers to the state with the item was shipped(unless they have offices there than the goods at subject to sales tax) It is mainly used againts business because it is eaiser to track their out of state purcahses (expecially when they write them off as expenses).

It will be interesting to see how the states collect on this.
Click to expand...

Indeed; people living in states with sales tax who buy things in states without sales tax (e.g., a CA resident like me buying things in OR) are supposed to pay use taxes to their home states, but enforcement seems lax.

Then again, collection of the music download tax could be implemented with music downloads simply by having the download client look at a user's billing address to determine the tax rate, much like how an online vendor like Newegg would look at my address to determine that I need to pay 8% or so in sales tax.
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I think NewEggs has offices or at least a warehouse in CA so they must charge you tax(it's intrastate commcerce). Because they don't have offices in VA they don't charge me tax.

Amd of course I do list my out of state purchase on my VA tax forms every year 😛

Point is, they will never be able to enforce as a use tax. It's not possible.
 
Originally posted by: ts3433
Originally posted by: YoshiSato
The use tax is nothing new. Every state with a sales tax has one for the consumption of goods in the state(what qualifies varies). The problem is enforcement since out of state companies are not required to file papers to the state with the item was shipped(unless they have offices there than the goods at subject to sales tax) It is mainly used againts business because it is eaiser to track their out of state purcahses (expecially when they write them off as expenses).

It will be interesting to see how the states collect on this.
Click to expand...

Indeed; people living in states with sales tax who buy things in states without sales tax (e.g., a CA resident like me buying things in OR) are supposed to pay use taxes to their home states, but enforcement seems lax.

Then again, collection of the music download tax could be implemented with music downloads simply by having the download client look at a user's billing address to determine the tax rate, much like how an online vendor like Newegg would look at my address to determine that I need to pay 8% or so in sales tax.
Click to expand...

I think NewEggs has offices or at least a warehouse in CA so they must charge you tax(it's intrastate commcerce). Because they don't have offices in VA they don't charge me tax.

And of course I do list my out of state purchase on my VA tax forms every year 😛

Point is, they will never be able to enforce as a use tax. It's not possible.
 
Like others have said, technically everything you buy online you are supposed to keep track of a file with your taxes. But I dno't know anyone that does... and I doubt it will ever happen.
 
Originally posted by: FrankyJunior
Like others have said, technically everything you buy online you are supposed to keep track of a file with your taxes. But I dno't know anyone that does... and I doubt it will ever happen.
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Until there's an internet tax
 
Simple answer is a flat rate tax applied to all products and services before you buy, with the rate standardised across the whole of the USA. Including both online and B&M services and products.
 
Originally posted by: CrackRabbit
Originally posted by: Ronstang
Originally posted by: CrackRabbit
Think about it for a second. It isn't just about music downloads, you are taxed in one form or another on almost everything you do or buy. At what point to people say enough is enough, you can't have any more.
Click to expand...

What good would it do? You would be labeled a criminal and the State would arrest you and punish you. Politicians don't care about the people or the country, they only care about keeping their jobs and gettings as much money from you as possible because they feel they are better equiped to decide how it is spent than you are. Without money to throw around politicians are truly powerless. Ever notice that whenever fault is found in a program or endeavor their response is that more money needs to be spent rather than investigating if the money already being spent is being done so in an efficient manner? They don't care becuase they are spending YOUR money and buying their power with it from YOU.....kind of a funny paradox isn't it?
Click to expand...

Yes and a rather sad one at that.
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Uh did you even vote? (or did your parents?) Did you ever lobby against it? If you're apathetic to it, then don't complain.

As for me, I would write a letter to my local politician and complain.
 
Originally posted by: chambersc
Originally posted by: FrankyJunior
Like others have said, technically everything you buy online you are supposed to keep track of a file with your taxes. But I dno't know anyone that does... and I doubt it will ever happen.
Click to expand...

Until there's an internet tax
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The "Tax Free" internet only means no taxes can be charged on Internet Service like there is on phone lines and other forms of communications.

It has nothing to do with commerce.
 
Originally posted by: Lonyo
Simple answer is a flat rate tax applied to all products and services before you buy, with the rate standardised across the whole of the USA. Including both online and B&M services and products.
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That is not the simple answer. While I do support the national sales tax to replace FICA and personal income it will not solve this "problem" of states not getting their tax cut.

Sure when I buy from new egg they charge me 23% fed tax on my $100 hard drive, but Virginia will never see their 5%, unless I file a use tax at the end of the year. Which will cost me and the state more than 5 dollars to process.

 
Originally posted by: YoshiSato
Originally posted by: Lonyo
Simple answer is a flat rate tax applied to all products and services before you buy, with the rate standardised across the whole of the USA. Including both online and B&M services and products.
Click to expand...

That is not the simple answer. While I do support the national sales tax to replace FICA and personal income it will not solve this "problem" of states not getting their tax cut.

Sure when I buy from new egg they charge me 23% fed tax on my $100 hard drive, but Virginia will never see their 5%, unless I file a use tax at the end of the year. Which will cost me and the state more than 5 dollars to process.
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Is that a typo YoshiSato? 😕

 
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