State Legislature Attempts to Tax All Digital Downloads

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State Legislature Attempts to Tax All Digital Downloads

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A bill before the Connecticut State Senate would make all digital purchases subject to a sales tax.

The first time I bought something online - I think it was this book from Amazon for a theater project - I was pleasantly surprised I didn't have to pay the hefty 8 percent sales tax (Edit: When I lived in CT, the sales tax was 8 percent. The tax rate is now 6.35 percent.) that everything else in my home state of Connecticut warranted. Some states have tried to make online merchants like Amazon or NewEgg charge tax, but so far digital purchases like, say, any forthcoming Mass Effect 3 DLC or Civ V on Steam have been sacrosanct. Connecticut lawmakers want to change all that by passing a bill to amend the tax code so that the government can tax every digital exchange, including movies, TV shows, and yes, games. Or at least that's what I think "digital audio-visual work" means.

The stated purpose of the bill is "to include digital movies, books, music, ringtones, audio and video works and similar downloadable products as subject to the sales and use tax." If passed at the next State Senate session on March 16th, the tax would go into effect on July 1, 2012.

Naturally, the Electronic Consumers Association is fighting this new tax on videogames. The proposed bill hits home for the gamers who work there because the offices of the ECA just happen to be in Wilton, CT, and would therefore be subject to this taxation. The ECA has set up a page to put gamers in Connecticut in touch with their local legislators to protest this new law.

"Tell the Connecticut Senate to not tax our hobby!" the petition reads. "Connecticut gamers, take a moment to tell your representative not to tax our hobby! Senate Bill 400 would implement a tax on digital downloads and would make it more expensive to enjoy video games. Let the Connecticut legislature know that this is not the right way to aid an economic recovery, and not the way to represent their constituents."

Head over to the ECA if you happen to live within the tiny Nutmeg State, or just want to learn more.

Source: CT.gov

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I remember reading on CNN I think it was Oklahoma(or some other state) that wanted to add a tax on mature video games. I think that bill got shut down bunch gamers went on twitter to protest it.

I know this is not going to be a very popular view but, if it's a sale and Connecticut already has a sales tax, shouldn't be in place already? Yes it sucks, but we should come with a better justification for not having this that "because its something WE like"

ForgottenPr0digy:
I remember reading on CNN I think it was Oklahoma(or some other state) that wanted to add a tax on mature video games. I think that bill got shut down bunch gamers went on twitter to protest it.

They had an article about that here. What the hell kind off gamer are you? Getting game news from CNN?

Ah, finally a legal proposal thats easy to make sense of that we can as a community piss all over.

ForgottenPr0digy:
I think that bill got shut down bunch gamers went on twitter to protest it.

Erm, care to add more words to that in order to get it to make sense?

Personally I have no issue with state-based internet sales tax. With the popularity of online purchases versus in-store purchases, states are losing sales tax revenue, which means they'll eventually either need to deal with online purchases or increase local income or property taxes. And I prefer commericalism to be the point of taxation rather than the state coming after me for having a car I need to have.

I don't get it, why SHOULDN'T you pay tax for something that is obviously a service or product?

The Senate is merely plugging a tax loophole; why the ECA thinks they deserve special treatment is unclear to me.

I don't see an issue here (other than maybe it doesn't target all online sales). Honestly I don't see why there isn't already a federal law in place that says when you buy something online you pay sales tax equivalent to where in the country you live.

Sounds like a way for the state to make a bit more money to me. I don't see the big deal.

Greg Tito:
The proposed bill hits home for the gamers who work there because the offices of the ECA just happy to be in Wilton, CT, and would therefore be subject to this taxation.

Umm, I don't want to be that one guy, but it's really early in the morning here, and this mistake forced me to reread the entire paragraph several times before my caffeine deprived mind clicked as to why everyone was so damned happy about all of this. At this time of day, my brain really doesn't have the capacity to compensate for misspelled words.

OT: "in this world nothing can be said to be certain, except death and taxes", and it doesn't look as though that's going to be disproved anytime soon. If many people enjoy something, and there is any kind of government involved, it's just a matter of time before you're going to start paying them for the pleasure. No use getting angry about it; that's just life.

You pay a sales tax when you buy a videogame in the store... so what's the problem with paying sales tax for the same game online?

Just so long as they still make amends for us sales tax exempt states.

wait why wouldn't you pay taxes for that?
not saying that a sales tax is always necessary but if there is one in place why wouldn't it apply to digital goods.

I can imagine the ECA not being too happy about this, but is an 8% sales tax really that big a deal? The government does need to get their money somewhere.

Hmm, captcha was 'Nest-egg'. Seems appropriate somehow.

Honestly, considering that taxes fund pretty awesome things like schools, libraries, police, and maybe health care if the next wave of republicans doesn't repeal it, paying taxes on things I buy isn't that horrific a thing. But since I don't know tax law, I'm a little concerned about how this works. Am I charged based on the state I'm in, the state where the business is run from, maybe even the state where the data is stored? And how would it affect international e-commerce?

I was admittedly livid about the proposed Oklahoma tax, but that was in the vein of a punitive 'I don't like things the youths of today do and want to punish them by making a grandstanding point,' not 'digital sales are sales, so we tax them for the same reason we do all sales.'

separate taxes for each state is dumb.
With that out of the way, of course they should be taxed, it's not like the savings are passed on to you and who do you think the tax money get's spent on, you, that's right.

I swear americans are petrified of taxes (huge generalisation based on ......bullshit)

Please.. I pay fucking 25% on digital items.

Interesting. I suppose this would have to apply to in-game store downloads like Valve's Mann Co. store as well. That'll make things nice and complicated, won't it. I guess Steam already requires users to have their full addresses stored in the system anyway for legal reasons, so it wouldn't be too hard to know who all to charge how much extra and where to send it.

Here in Ohio, we have a thing called a "use tax", which is a sales tax you have to pay at the end of the year along with the state income tax. You have to keep track of all the money you've spent online (easy enough to do if you use a service like PayPal for everything, but a pain in the butt if it means digging through all your credit card bills and separating the online purchases from stuff you bought in stores) and report it on the 1040 form, then use your county's tax rate to figure how much you owe. As far as I know, there's no exception for digital downloads. I've always just added up all my PayPal transfers from the last year and used that amount, and for the last few years most of that has been Steam.

Until digital property is treated in the same way as physical property with all the same legal protections that are bestowed upon digital Physical property such as the ability to resell used digital property or not being removed from ones property without recompense, then absolutely not. If the government does not do its job to protect it or the consumers, then they absolutely do not deserve to profit from it.

If they do that, then absolutely, it becomes an issue of making the property on equal standing under state laws and taxes equally applicable.

Firstly, why shouldn't you pay tax just because it's digital? It's still a sale.

Secondly, 8%? Really, you are calling 8% hefty? Try paying 20% tax on everything you buy, in a country where items are generally more expensive than America in the first place.

*sees title*
Hm, some random state is gonna try and tax digital downloads. Well, good luck to whatever state that is, I hope it doesn't pass.
*sees that it's my state*
OH SHI-
*immediately contacts representative*

viranimus:
Until digital property is treated in the same way as physical property with all the same legal protections that are bestowed upon digital property such as the ability to resell used digital property or not being removed from ones property without recompense, then absolutely not. If the government does not do its job to protect it or the consumers, then they absolutely do not deserve to profit from it.

Then they'll just argue that it's a "service," not a "good." The same way you still pay sales tax on movie rentals even though you don't own the movie.

...Wait, do they charge sales tax on things like movie rentals?

Solving US debt: 5% sales tax on everything. About 300 million people in the states right? If they just do that and DON'T spend anymore than what they currently spend, that would help alot, but it won't happen, no sir.

Steve the Pocket:

viranimus:
Until digital property is treated in the same way as physical property with all the same legal protections that are bestowed upon digital property such as the ability to resell used digital property or not being removed from ones property without recompense, then absolutely not. If the government does not do its job to protect it or the consumers, then they absolutely do not deserve to profit from it.

Then they'll just argue that it's a "service," not a "good." The same way you still pay sales tax on movie rentals even though you don't own the movie.

...Wait, do they charge sales tax on things like movie rentals?

Depends on the state and their view on if goods and services are taxable.

Still, this issue of digital property needs to be resolved and this is a perfect point for this matter to be viewed and determined once and for all. Dont give them a cut until they do their job.

I was on the same note, I didn't care until I saw CT and then I cared....a lot. I really don't want to pay even more taxes than I already do.

ECA seems to be trying to take advantage of the gaming community to manipulate them for their own desires. Dont support it it isnt a tax on games its just a loophole fix.

viranimus:

Steve the Pocket:

viranimus:
Until digital property is treated in the same way as physical property with all the same legal protections that are bestowed upon digital property such as the ability to resell used digital property or not being removed from ones property without recompense, then absolutely not. If the government does not do its job to protect it or the consumers, then they absolutely do not deserve to profit from it.

Then they'll just argue that it's a "service," not a "good." The same way you still pay sales tax on movie rentals even though you don't own the movie.

...Wait, do they charge sales tax on things like movie rentals?

Depends on the state and their view on if goods and services are taxable.

Still, this issue of digital property needs to be resolved and this is a perfect point for this matter to be viewed and determined once and for all. Dont give them a cut until they do their job.

I was all set to admit the fairness of the tax but you brought up a great concern I have with commerce in the digital age. Good thinking.

As for the ECA, it's their job to advocate for consumers. It's not surprising they would be against a tax that affects consumers even if it seems fair.

I'm glad I'm not the only one who doesn't see an issue with digital sales being taxed. Just like any person I agree that it sucks to pay taxes but as internet shopping continues to grow, there is zero reason for it not to be taxed. Sorry ECA, you're on your own.

ablac:
ECA seems to be trying to take advantage of the gaming community to manipulate them for their own desires. Dont support it it isnt a tax on games its just a loophole fix.

Pretty much. Hopefully cooler heads prevail and we don't have unwarranted internet rage.

There is a HUGE difference between hard copies vs digital copies for tax to make sense. According to game companies like EA and Activision, we are mearly borrowing or leasing a copy of their games. So I am to be charged tax for something that isn't even mine to begin with. When it comes to vehicles, we have an option to own said vehicle/car/van/etc once we believe we can afford it. You can't do that with most downloadable copies of media/entertainment.

Those "$10" DLC are not going to look appealing when they become $12-$15usd depending on how much tax they want to add. Just because other countries get shafted by tax on Digital Distribution does not mean I want to be shafted too.

Oh you silly Americans, thinking an 8% sales tax is hefty :P

I already pay a 10% sales tax on Steam (because I live in the same state as their HQ). It's not too bad.

Ah politicians will stop at nothing to grab money to pass to their friends and relatives. The story is as old as time.

Remember, this is the state that brought you Joe Lieberman and Chris Dodd. I love my state (yep, I live in the Constitution State), but our politicians are complete dickheads.

rembrandtqeinstein:
Ah politicians will stop at nothing to grab money to pass to their friends and relatives. The story is as old as time.

This money has nothing to do with the politician's bank accounts. They will pay themselves even if they have to bankrupt the state to do it. Taxes like this (and other ones that actually make sense) just allow for them to leave some/more for the rest of us.

If hard copies of said media are already taxed, why is everyone getting so butthurt about them being taxed in a different form of media?

And to whomever said that you don't "own" digital copies, obviously you didn't read the EULA that comes with your hard copy.

While you may own the disc said game comes on, it gives you no more rights than a digital copy does.

Yup. I do not like this one bit.

But why not? You pay taxes for everything thing el... *GUNSHOT!!!*

Fuck you I do not want to pay more, simple and cheap as that.

I am a fuegal frella.
(Skip ahead to 5:18)

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