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North Carolina Considers New Online Taxes

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North Carolina Considers New Online Taxes

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The state of North Carolina is examining the practicality of imposing a sales tax on digital downloads in order to help tackle its $2 billion budget deficit.

It's not about to happen anytime soon, but a legislative committee is considering how to modernize the state's tax code in order to bring them into the online era. "We used to think of everything in terms of being tangible," said Democrat Representative Paul Luebke of the North Carolina General Assembly. "Nobody thought of how you could possibly download anything."

"If you buy a book in a bookstore, you're going to have to pay sales tax on it," he added. "If you're downloading a book from a book seller, you should have to pay sales tax on that as well."

Researchers have said that taxing downloads of music, movies, books and software could generate about $12 million over the next fiscal year, a tiny portion of the $2 billion shortfall the state is currently looking at. North Carolina Technology Association CEO Brooks Raiford also expressed "concern" about the idea, saying, "The consumer is already very highly taxed, the economy is stretched."

Numerous questions surround any possible implementation of such a plan. Would it apply only to retailers in North Carolina, or would sellers in other states be expected to collect - and pay - the sales tax when selling to customers in the state? Similarly, would out-of-state customers of N.C.-based businesses be expected to pay? And how will tech-savvy consumers, many with access to "alternate methods of acquisition," react to the idea of paying tax on an intangible product like DLC?

The evolution of digital life has largely outpaced both criminal and civil legislation, and while laws - tax laws included - do need to be updated and brought in line with contemporary society, a ham-handed cash grab is the wrong approach to take, a point touched on by Raiford. "All we're asking is that those considerations be taken carefully and that the industry be asked for their input as the legislation is finalized," he said.

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Why don't the congress members or NC just take a pay cut, we all know they are not in session year round, maybe 5$ less an hour?

Sounds like they need a better infrastructure to support the costs of the state government. In fact most states rely on debt as an asset and now they are reaching to the latest frontier of DLC. Now most of the us who have been around have been used to DLC being free and it is only until recently with the introduction of the xbox and this gaming generation that microsoft, PS, and Nintendo have been doing micro transactions.

I really doubt the lawyers creating this proposal will understand the mess they are getting themselves into and only seeing the possible positive result. I know states are desperate for revenue but building a better infrastructure will be a better result to cut costs and create programs to build revenue.

Just like the federal government the state government need a balanced budget that produces a profit so the state government can handle domestic issues.

wasn't there like a federal law put in place saying "no internet tax" a while ago? i think they probly need to look at what money is being spent and cut that, like salaries

i think that cutting salaries for higher ups is a really good thing and not just in the government but in business too, especially if you are profit sharing

I live in North Carolina and I'm surprised that this state had two billion to waste.

I'm sure if THIER shit was constantly taxed it would be different. You know they're rarely online, only once in a while to try and get their kick of internet bingo and feet.

This is an excellent idea!
I have been wondering how best to increase piracy, but the government beat me to the punch. Good show.

And this in turn will just drive more and more people to download things for free (illegally). I understand that charging sales tax for this is just like charging sales tax on a CD in a store, and that it will make money, but for what little money that is? I would hope they could find a better way.

I live in NC. I so don't want this to be passed. In a bad, bad way I don't want this to be passed.

We're in debt. Great. Wonderful. We need to get out of it. No arguments there. But when you take MORE money from the people, that's LESS money they can spend everywhere else.

I don't know about you all, but I still buy plenty of things from good, old-fashioned brick-and-mortar stores and those goods are taxed and taxed well.

 
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