Congress Makes a Move toward Digital Goods Tax Fairness

6:36 PM August 2, 2013

If you've ever used your smartphone or tablet to buy and download a digital good or service, such as an app, music, movie, e-book, video game, etc., then you'll want to pay attention. When it comes to how you're taxed for those purchases, there is not a "national framework" or some "rules of the road" for how this growing digital marketplace should be fairly taxed at the state and local level. 

Right now it's possible you could be taxed by several different jurisdictions for the same digital purchase. For example, let's say you pay your wireless service bill in one area code, but you buy something with your device when you're in another one, from a company in yet another part of the country. Under today's tax regulations, it's possible you can be taxed by all three jurisdictions! WIPP follows wireless taxes closely as many small businesses reply heavily upon this technology. We believe it's important to make sure women-owned small businesses wireless consumers are treated fairly and that all of us have a reasonable and sensible tax structure for such purchases.

Senators Ron Wyden (D-OR) and John Thune (R-SD) introduced the 'Digital Goods and Services Tax Fairness Act' (S.1364) last week. This bill would prevent digital goods and services purchases from being subject to multiple and discriminatory taxes. This bipartisan federal legislation would establish a national framework for how this growing digital marketplace should be fairly taxed at the state and local levels.

What the Bill Does

  • The legislation being considered would make sure consumers aren't punished with multiple taxes on digital purchases. It would prevent consumers from being double or even triple-taxed on an mp3, video or on that latest incredible app, as could be the case today.
  • The bill reinforces Congress's important role in making tax policy for commerce that crosses state and international borders. That's more important than ever with so many people making online purchases with their wireless device.
  • It would clearly establish which jurisdiction (the consumer's home billing address, presumably) has the right to tax digital transactions.


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