Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Mississippi Bill Would Tax Software Sales

kdawson posted more than 5 years ago | from the join-the-crowd dept.

Government 293

Byzantine writes "The Mississippi Legislature has passed MS House Bill 1461 which would amend the state's tax laws specifically to charge sales tax on 'electrically transferred digital products,' including products bought via mail-order. The bill is currently on the governor's desk awaiting signature." Softpedia claims that 20 states have enacted download taxes of one sort or another — most of them for iTunes music — and that New York is considering taxing downloads of all kinds.

cancel ×

293 comments

Sorry! There are no comments related to the filter you selected.

thus ensuring (1)

bugs2squash (1132591) | more than 5 years ago | (#27142373)

Mississippi stays at the bottom of the heap

Re:thus ensuring (4, Funny)

geekoid (135745) | more than 5 years ago | (#27142945)

Maybe someone should tell them it's not FIFO~

Re:thus ensuring (4, Interesting)

yog (19073) | more than 5 years ago | (#27143001)

Mississippi stays at the bottom of the heap

Don't worry, they'll be joined shortly by many other states hungry for revenue. The problem with this bill (well, one of many problems, actually) is that it will damage the nascent e-book and e-music industry just as they're struggling to get established, even as paper and CD publishers flounder. Also, it will largely tax the teens and 20-30-somethings who actually purchase these kinds of products. A rather regressive tax.

It should be easy enough to get around this law. If you read the bill, it spells out the precise types of electronic "products" that are taxable. So the vendors can simply convert these products to non-ebooks and non-music and non-videos, and provide a little converter that allows the buyer to change them back into ebooks and music and videos at his/her discretion. We don't sell music, we sell blobs of binary data. If you find a way to transform it miraculously into your favorite music, more power to you!

Re:thus ensuring (2, Interesting)

penix1 (722987) | more than 5 years ago | (#27143133)

An even better idea would be a refusal to sell to residents of those states. The moment the billing / destination address is identified as a taxing state, refuse the sale based on the tax legislation. If it's online, link to it specifically. Nothing like political pressure to make a politician squirm. Once those states stop having sales from Internet based sources, they'll change their tune.

Re:thus ensuring (1)

LaskoVortex (1153471) | more than 5 years ago | (#27143269)

Why don't they just tax email advertisements? Then they can go after those fuckers with a gun when they don't pay up.

Re:thus ensuring (1)

digitig (1056110) | more than 5 years ago | (#27143603)

How many businesses are going to say "Hmm, shall we make a profit, or shall we make a political statement"? Rather few, I think, will go for the principle; almost all will take the sale. The ones who would have sufficiently strong principles (in the appropriate direction) are probably producing open source anyway. Does the bill tax support?

Re:thus ensuring (3, Funny)

Greyfox (87712) | more than 5 years ago | (#27143663)

I don't think they actually have computers there. I've never met anyone claiming to be from Mississippi on the Internet.

Tax Evasion? (4, Insightful)

veganboyjosh (896761) | more than 5 years ago | (#27142411)

I wonder how this will play out with regards to illegal downloads? If one gets caught/charged/accused of transferring "digital goods" to which they don't own the copyright to, are they then responsible for the taxes those goods would have generated had they been legit?
Reminds me of Al Capone's downfall...

Re:Tax Evasion? (4, Insightful)

geekoid (135745) | more than 5 years ago | (#27142471)

tax fraud, that's how they will nail downloaders.

Ingenious.

Re:Tax Evasion? (0, Redundant)

nurb432 (527695) | more than 5 years ago | (#27142505)

That is how they got Capone.

Re:Tax Evasion? (4, Funny)

Anonymous Coward | more than 5 years ago | (#27142607)

tax fraud, that's how they will nail downloaders.

Ingenious.

That is how they got Capone.

They got him for tax evasion...that's how they will nail downloaders. It's genius!

-- Brought to you by the Redundancy Department of Redundancy

Re:Tax Evasion? (0)

Anonymous Coward | more than 5 years ago | (#27142611)

That is how they got Capone.

your redundancy is redundant

Re:Tax Evasion? (0)

Anonymous Coward | more than 5 years ago | (#27143389)

I wonder how this will play out with regards to illegal downloads? If one gets caught/charged/accused of transferring "digital goods" to which they don't own the copyright to, are they then responsible for the taxes those goods would have generated had they been legit?

No. There was no sale or transfer of ownership, so no sales tax is payable.

Now if you started selling your illegally downloaded material, you would have to include the revenue from the sales on your income tax.

Inevitable.... (1)

IamGarageGuy 2 (687655) | more than 5 years ago | (#27142421)

I don't believe that any reasonable person believed that online sales would not eventually be taxed. This government after all - thier job is to find things to tax after all. I assume it took this long because of the ineptitude of beuracracy.

Re:Inevitable.... (2, Insightful)

geekoid (135745) | more than 5 years ago | (#27142479)

There Job is to find way to pay for services that people demand.

No one taxes to just tax. It's hard enough to tell people you need to tax for the things they want!

Re:Inevitable.... (2, Interesting)

Chabo (880571) | more than 5 years ago | (#27142499)

No one taxes to just tax.

Obviously you don't live in California.

Re:Inevitable.... (1, Insightful)

geekoid (135745) | more than 5 years ago | (#27142603)

I lived in CA long enough to remember when they had an excellent schools system, both K-12 and community college. Watched it all go to hell when they passed prop 13. Limiting taxes.
I left in 2000.

Re:Inevitable.... (5, Interesting)

Chabo (880571) | more than 5 years ago | (#27142711)

I recently came to California from New Hampshire, which introduced a property tax several years ago. I wasn't around for Prop. 13, but after doing a bit of reading, I'm glad it passed. If someone owns land, and has little income, why should they be punished for that?

I know a man who works as a teacher in New Hampshire who owns over 100 acres of land. The land's been in his family for at least two generations. The property tax was passed, and he nearly went bankrupt paying the taxes on the land because the land value assessments were artificially inflated by the housing market bubble.

I don't like heavy taxation in any form, but property taxes are disproportionately unfair to anyone who owns land and doesn't have a high income.

Re:Inevitable.... (1)

Glith (7368) | more than 5 years ago | (#27142873)

He must be a very old teacher. NH passed the world's first property tax. Back in 1742. Notably it's also the only major tax the state has.

Re:Inevitable.... (2, Interesting)

Chabo (880571) | more than 5 years ago | (#27142979)

I'm fairly young, but I thought that the state-wide property tax was only enacted after the Claremont Decision. This seems to be confirmed by the fourth all-caps paragraph of this story:

http://www.nhpr.org/node/4290 [nhpr.org]

Is this incorrect? I thought that the NH tax system before the Claremont Decision involved only direct taxation at the town level.

Re:Inevitable.... (1)

spood (256582) | more than 5 years ago | (#27142939)

Land is a finite commodity. If everyone got the same amount, there would only be about 5 acres of land available per person today.

It might not be fair to the teacher to have to pay high taxes on the land, but it's not fair to society to let him keep it for no/low cost when it might be put to better, more productive use for society by someone else.

If he can't afford it, let him sell it to someone who can. If there's no incentive for people to make productive use of capital, the economy stagnates.

Re:Inevitable.... (2, Insightful)

Anonymous Coward | more than 5 years ago | (#27143115)

I think the next tax will be computer taxes... for every computer you own you will be taxed appropriately. Doesn't matter if the computer is a TI-2 or the latest Dell super computer. To make it easy a computer will be defined by a cpu, for every cpu in your house you're taxed...

If you can't afford to have a quad core computer, microwave, refrigerator, tv, remote control, digital cable box, digital thermostat, hot water heater, alarm clock, cell phone, LAN telephone, home router, home entertainment center, ps3 (ooo x8), xbox 360 (x3), I could probably go for awhile.

I hope this puts into light that property should not be taxed, because guess what, property is property regardless of land or home electronics.

Re:Inevitable.... (1)

LaskoVortex (1153471) | more than 5 years ago | (#27143311)

It might not be fair to the teacher to have to pay high taxes on the land, but it's not fair to society to let him keep it for no/low cost when it might be put to better, more productive use for society by someone else. If he can't afford it, let him sell it to someone who can. If there's no incentive for people to make productive use of capital, the economy stagnates.

Brilliant use of capitalist arguments to support socialism. Just curious--which are you?

Re:Inevitable.... (1)

eclectro (227083) | more than 5 years ago | (#27143471)

Actually most property taxes goes to pay for schools to educate children. Nobody believes in socialism until it is possible to get someone else to pay for your own bills.

Re:Inevitable.... (1)

geekoid (135745) | more than 5 years ago | (#27143123)

"someone owns land, and has little income, why should they be punished for that?"

Umm, since this hadn't happened before the Prop, why would it suddenly start happening without the prop?
Yeah people where all 'Don't throw old ladies out in the street' even though there had never been a recorded incident of that happening.
If I had know the term then, I would have called it FUD.

In every state I have looked into it, taxes are based on the accessed value from the county, not on the market conditions. In CA my condo was assessed at 150K but sold for 182K.
And that was in Huntington Beach.
In two years, the scommunity colleges went from anyonwe with a part time min wage incomes could take course to the point where the poor couldn't afford it.

Add to that there where other proposal for things like Freezing taxes for people whoa are retired.

The worst thing was they never stopped to thing how they where going to continue to pay for the services.

Why should tax payers support people who can't afford to pay there property tax? Please avoid appeal to emotion.

If I can't afford my property tax now, will you carry me?

Re:Inevitable.... (1)

jabithew (1340853) | more than 5 years ago | (#27143609)

Why should tax payers support people who can't afford to pay there property tax?

Circular reasoning.

Re:Inevitable.... (1)

Buelldozer (713671) | more than 5 years ago | (#27143745)

:blink::blink:

So, just where do you think the county's assessed value numbers come from? Thin air? The Assessor's magic 8 ball? Roll 5d6?

The ignorance in your statement is staggering.

The county's assessed value is based almost exclusively on market value!

Re:Inevitable.... (0)

Anonymous Coward | more than 5 years ago | (#27143149)

While i can't say i was alive to see the pre-prop13, since it was passed in 1978, I have to say that our school wasn't even close to underfunded..they just didn't know how to spend. Full tearout and replacement of sod every year, campus wide fiber optic network, repainting of the buildings, new fencing, re-building the sports arenas, etc... and this was a yearly thing, they'd build one year, tear it down the next and rebuild, the sports fields and the gym were renovated pretty much every summer, hell, our gym was probably worth more than the entire rest of the school combined. I guess our 60 year old science textbooks held together with tape and containing inaccurate information, or our history textbooks that don't go past 1975 are weren't very important. We won every sporting competition in our area though, i guess that's all that matters....

Re:Inevitable.... (0)

Anonymous Coward | more than 5 years ago | (#27143469)

1978 - Wasn't that about the same time California became Mexifornia?
Limiting taxes isn't a bad thing, but allowing millions of people to overwhelm a region sure is.

Re:Inevitable.... (4, Insightful)

Buelldozer (713671) | more than 5 years ago | (#27143691)

Sorry, I know this is off topic but I can't let it pass without comment.

So you REALLY think that it was Prop 13 that sank California?

Why is it always the income side of Government that is deficient? How about examining the expense structure of the state and how it changed.

Somehow more tax money NEVER solves the revenue problem faced by Government. NEVER. NOT ONE TIME.

Re:Inevitable.... (2, Insightful)

Anonymous Coward | more than 5 years ago | (#27142751)

No, their job is to preserve individual liberty and to stay within the boundaries set for them by the Constitution. The US government is failing terribly at both.

Re:Inevitable.... (2, Interesting)

CrimsonAvenger (580665) | more than 5 years ago | (#27142753)

No one taxes to just tax. It's hard enough to tell people you need to tax for the things they want!

I wish I lived in your world. Here in the Real World (tm), governments tax anything they can get away with taxing.

After all, if you have revenue, you'll find a way to spend it....

Re:Inevitable.... (2, Insightful)

Obfuscant (592200) | more than 5 years ago | (#27142859)

There Job is to find way to pay for services that people demand.

No, their job is to provide the services they are supposed to be providing. They have gone so far afield in the last few decades that many people believe that "I want" is justification for the state to do something. "I want a place to live", and politicians jump to help. "I want a free college education". "I want a museum honoring left-handed butterfly collectors."

It's hard enough to tell people you need to tax for the things they want!

It's supposed to be hard to say that, and they SHOULD be saying that, but they don't. They pretend that it's "free". "Free" education. "Free" healthcare. "Free" housing. Don't ever expect to hear a politician that is in favor of spending on something to call it "taxpayer-funded" service. It's always "free".

Re:Inevitable.... (1)

icebike (68054) | more than 5 years ago | (#27142763)

Typically states do not tax sales to citizens of other states or tax good purchased from other states because 1) its bad for business, driving mail-order companies out of state, and 2) The murky provisions of Article 1 Sections 9 and 10 have, in the past been seen as making such a tax illegal.

Therefore, most states will only tax transactions where the seller has a presence in the state.

So, are the retailers going to report these sales? (1)

pecosdave (536896) | more than 5 years ago | (#27142461)

Or are they going to tax based on the honor system? What if I lived in Mississippi, but I traveled to Louisiana and downloaded music? What if I host a server in Colorado, pay for downloads from that server remotely, then sync my file system with that server?

Re:So, are the retailers going to report these sal (1)

geekoid (135745) | more than 5 years ago | (#27142503)

I would wager that while technically you would need to pay taxes in those scenarios, but no one is going to give a rats ass because most people will be downloading through a service like iTunes from their home. Your examples would apply to so few people that it wouldn't be worth paying someone to track you down.

Re:So, are the retailers going to report these sal (1)

pecosdave (536896) | more than 5 years ago | (#27142577)

They syncing version maybe - though it's an interesting idea.

The leaving the state one - absolutely not. You can't charge sales tax in one state for business done in another state, especially business that is most likely interstate anyways. I'm not going to research the location of the servers to be certain - but iTunes, probably hosted in Washingston state or California. How would Mississippi have any right to tax a transaction between Louisiana and California? I regularly travel between Texas and Louisiana, I sure as hell don't have to pay Texas state tax on Louisiana gas when I cross back, the same thinking should apply.

Re:So, are the retailers going to report these sal (1)

sqlrob (173498) | more than 5 years ago | (#27142695)

You can't charge sales tax in one state for business done in another state

A rose by any other name... [wikipedia.org]

Re:So, are the retailers going to report these sal (2, Interesting)

geekoid (135745) | more than 5 years ago | (#27142701)

http://window.state.tx.us/taxinfo/use/ [state.tx.us]

Many state do require you to report items purchased in another state, based on how long ago you bought it.
You might want to find out about that tax fraud you've been committing.

Re:So, are the retailers going to report these sal (2, Interesting)

AuMatar (183847) | more than 5 years ago | (#27142743)

Its called a "use tax". For example CA charges one on anything bought on OR (where there is no sales tax). Buy a car there and you'll quickly find yourself being taxed by CA (although admittedly only big things like cars get tracked down. Everything else is done on the honor system, with remarkably few people filling out anything but a 0 on that line.

Re:So, are the retailers going to report these sal (0)

Anonymous Coward | more than 5 years ago | (#27143523)

You can't charge sales tax in one state for business done in another state,

True.

I'm not going to research the location of the servers to be certain - but iTunes, probably hosted in Washingston state or California. How would Mississippi have any right to tax a transaction between Louisiana and California?

It doesn't matter where the servers are, it is where the business is. Apple has a business presence in all 50 states (AFAIK), so Apple isn't allowed to claim that the servers are in Cupertino so we only charge sales tax for California residents.

I regularly travel between Texas and Louisiana, I sure as hell don't have to pay Texas state tax on Louisiana gas when I cross back, the same thinking should apply.

Well, actually you should pay the applicable Texas sales tax (if any) when you cross back (nobody does though). But the onus is on YOU to remit the tax to Austin, and not on the Louisiana gas station to collect the Texas sales tax and send it to Austin.

Re:So, are the retailers going to report these sal (2, Interesting)

Chabo (880571) | more than 5 years ago | (#27142551)

I have a feeling this will be implemented like sales tax for purchasing items online: you buy an item from Newegg, and they have to charge you sales tax if you live in a state where they have a physical presence (CA, NJ, TN), even if your order is shipped from elsewhere.

Re:So, are the retailers going to report these sal (1)

pecosdave (536896) | more than 5 years ago | (#27142649)

Good luck getting a retailer in New Jersey to comply with Mississippi state law if they don't have to, especially small retailers.

Though, getting Apple and a few the largest others, like Amazon to comply wouldn't be as hard.

Re:So, are the retailers going to report these sal (2, Interesting)

Chabo (880571) | more than 5 years ago | (#27142759)

Read my post again: I listed those three states for Newegg because of sales tax. Newegg has locations CA, NJ, and TN, so if they ship an order anywhere in CA, NJ, or TN, they have to charge sales tax. If Newegg ships a package to any of the other 47 states, they don't charge sales tax.

As far as I can tell, if Mississippi passes a Software Sales Tax, then the only retailers that have to comply are retailers in Mississippi to Mississippi residents.

Re:So, are the retailers going to report these sal (1)

dslbrian (318993) | more than 5 years ago | (#27143143)

NY tried something similar last year. Newegg started out complying with NY's sales tax, but then told them to shove it. Plenty of references here - Newegg Defies New York Sales Tax Law [slashdot.org]

Re:So, are the retailers going to report these sal (1)

Clay Pigeon -TPF-VS- (624050) | more than 5 years ago | (#27143429)

I am not a lawyer, but I believe that there is a dormant commerce clause issue when states try to tax sales of businesses that do not have a physical presence in the state.

Re:So, are the retailers going to report these sal (1)

geekoid (135745) | more than 5 years ago | (#27142811)

Yes. While technically you should ahve been paying the use tax on that yourself* , nobody does.
Wasn't a big deal when .00001% of sales where mail order. Now it's a big deal.

Mail order companies know this is coming, that's why they are pushing for states to have a single tax for the entire state for these purchases.
It's one thing to ahve to stay up to date on 50 sales tax numbers, it's another for every state county city, etc . . . in the US.

Maybe the feds should apply a flat rate to all sales, and then divide those monies up to all states based on population.

*assuming your state has a sales tax.

Logical Move (2, Insightful)

nurb432 (527695) | more than 5 years ago | (#27142489)

When the chips are down, tax people even more and damage the economy further.

Re:Logical Move (2, Insightful)

geekoid (135745) | more than 5 years ago | (#27142855)

Please show me where taxes on the citizens hurt the economy. I am not talking about corporate taxes; that is a different matter.

They only way out of this is education, and education costs money. You need things for civilization, and that takes taxes. Increasing purchase, and decreasing income will not work.

Re:Logical Move (0)

Anonymous Coward | more than 5 years ago | (#27143441)

Due to lower income and capital gains collections, states are trying to increase the collection of sales taxes and fees. Regressive taxes are socially harmful.

Re:Logical Move (2, Interesting)

jabithew (1340853) | more than 5 years ago | (#27143693)

Please show me where taxes on the citizens hurt the economy.

This is the second time I've posted this link [wikipedia.org] today.

Re:Logical Move (2, Informative)

copponex (13876) | more than 5 years ago | (#27142895)

When the mode of commerce changes , tax people in order to fund the government and pay for things like social services, roads, and other infrastructure.

I get so tired of this argument. Government is not always bad, taxes are not always bad, and markets are not always the answer. The rest of the world has been dealing with these realities since the 1970s. If we don't wake up, our wealth isn't going to last into another generation.

And finally, the "right" to get wealthy is less important than anything on the Bill of Rights. Liberty has nothing to do with owning a Hummer.

Tax digital downloads and amil order products? BFD (5, Interesting)

rtrifts (61627) | more than 5 years ago | (#27142507)

I live in Canada. Here, all of these products are taxed like any other good or service - and there is no mail order freebie to distory the level playing field of the retail economy by not having to pay them via mial order. Up here? It's not new. It's not shocking. Believe it or not, the sun still comes up every morning - the world turns. Then it gets dark and we go to sleep. Every day. Life goes on.

Thing is, the federal debt in the USA has been spiralling so fast since 2000 that all of these "reports" and pointing to same as the portents of the Four Horsemen are going to go the way of the dodo in a dozen years or so - or less.

You simply will not have a *choice* but to increase taxes in the USA to at least Canadian and possibly Western European levels if you don't deal with it soon enough. (My bet - you won't deal with it soon enough. Americans are nutty when it comes to taxes.) You'll put it off and put it off and then put it off somemore until there is no wiggle room left at all. And then you will point fingers at your politicians - instead of you the voters - which is *precisely* where the blame will lie.

That's the price you will ultimately have to pay for spending money for decades that you simply do not have. That prediction is not a *maybe*. It is a *certainty*. The cheque is coming to your table. Deal with it (and kindly quit your whining about it too, please. It's not a big deal.)

Re:Tax digital downloads and amil order products? (1)

geekoid (135745) | more than 5 years ago | (#27142723)

This is a result of the Republicans loosening banking regs. since Reagan and the 'choking the beast' tax cuts.

Re:Tax digital downloads and amil order products? (1)

MasaMuneCyrus (779918) | more than 5 years ago | (#27143119)

America was in debt since ever before Andrew Jackson and ever after Andrew Jackson. Certainly long before Reagen.

Jackson despised any form of national bank (in our time, the Federal Reserve), and saw to their bankruptcy and demise, as he thought that whoever controlled the money had power and he wanted the people to have power.

After bankrupting the national bank, he became the first and only president to date to pay off the national debt. I suspect he will also be the last president to pay off national debt, as the United States probably won't exist in its current form by the time it will take to pay off the $15 trillion left by the end of Obama's first time.

Re:Tax digital downloads and amil order products? (0)

Anonymous Coward | more than 5 years ago | (#27142787)

I wouldn't place the blame on voters who really have little say on what politicians do. When we vote, it's usually a choice between bad or worse...

Re:Tax digital downloads and amil order products? (2, Insightful)

CrimsonAvenger (580665) | more than 5 years ago | (#27142801)

Thing is, the federal debt in the USA has been spiralling so fast since 2000 that all of these "reports" and pointing to same as the portents of the Four Horsemen are going to go the way of the dodo in a dozen years or so - or less.

All very well and good.

But Mississippi isn't the Federal government, and Ms can tax whatever it likes without affecting the Federal deficit in the slightest.

Note, by the way, that Ms, like pretty much all the States (and unlike the Federal government), are required to balance their budgets.

Re:Tax digital downloads and amil order products? (1)

kpainter (901021) | more than 5 years ago | (#27142961)

Note, by the way, that Ms, like pretty much all the States (and unlike the Federal government), are required to balance their budgets.

Only up to the point that the person doing the counting runs out of fingers and toes.

Re:Tax digital downloads and mail order products? (1, Redundant)

rtrifts (61627) | more than 5 years ago | (#27143007)

I didn't suggest Mississippi was the Federal Government. I did suggest - and do suggest - that the overall deficit burden at all local state and Federal levels is interdependent and is certain to result in cessations of funding and transfers from one government level to the next, requiring significant increase in taxation over the next 12 years to come close to maintaining current commitments.

That means when the federal government runs a deficit, all ogvernment levels will ultimately be paying taxes to deal with the fallout of that red ink on their budgets in subsequent years. There is no free lunch.

My point: You will not have a choice. You once had that choice and you made that choice. You have been enjoying a dollar's worth of government for much less than a dollar for decades. That dollar's wortg of government was not "on sale". The bill for the difference - between what you got and what you paid for it - comes due.

In Canada, unlike virtually all of Western Europs and the United States, we have bene running significant federal budget surpluses since 1995. 2009 will be our first year in the red in over 14 years. That's the cost of bad times. We'll go back in the black in two or three years, I expect. The taxpayers in Canada would rather services were not cut and deficits are not run unless they have to be. We will keep tax levels higher in order to make that happen.

Americans? They won't. Someone says raise taxes, and middle America freaks out.

That, essentially, is the story of America since before Day One. It has its strengths - and it has its weaknesses, too. Welcome to "weaknesses".

Americans have been told that they can pay now or pay a lot more later. They have consistently chosen "a lot more later" please. Without ever really *believing* that "later" will actually come.

Fair enough. In many cases (now, say) that's probably good fiscal policy. In 2002-3, choosing to go fight TWO wars and cut taxes at the same time? All by borrowing the money from the Chinese to do it?

That's maybe not so good a fiscal policy.

Good or bad... doesnt' really matter now. That bill comes due either way.

Moral of the Story: Man up and stop whining about it.

Re:Tax digital downloads and mail order products? (2, Insightful)

CrimsonAvenger (580665) | more than 5 years ago | (#27143203)

I didn't suggest Mississippi was the Federal Government. I did suggest - and do suggest - that the overall deficit burden at all local state and Federal levels is interdependent and is certain to result in cessations of funding and transfers from one government level to the next, requiring significant increase in taxation over the next 12 years to come close to maintaining current commitments.

Not so much as you might think. Federal commitments are just that - Federal. If the Feds don't, or can't, send the money to the States to cover Federal commitments, the States aren't actually under any obligations to find money to pay for those Federal commitments.

That means when the federal government runs a deficit, all ogvernment levels will ultimately be paying taxes to deal with the fallout of that red ink on their budgets in subsequent years. There is no free lunch.

Nope. Feds can't pay their bills, they can't. Doesn't obligate the States to pay the Fed's bills.

My point: You will not have a choice. You once had that choice and you made that choice. You have been enjoying a dollar's worth of government for much less than a dollar for decades. That dollar's wortg of government was not "on sale". The bill for the difference - between what you got and what you paid for it - comes due.

Won't argue with that. But much of that "dollar's worth of government for much less than a dollar" has been at the Federal level. States aren't allowed to play those games, generally.

So, when the piper comes calling for his payment, the Feds will be raising taxes on everyone and everything to make up the differences. But the State governments won't be in that pickle - they have no deficit spending to make up, and the Feds can't really require the States to spend money (well, they DO do so now and then. But the Courts generally tell them to take a flying leap if the States don't want to play).

So, in ten or twenty years (I'm betting closer to ten than twenty, myself), the Feds are going to be in a serious crack. But the States will, in general, be fine.

Re:Tax digital downloads and mail order products? (1)

rtrifts (61627) | more than 5 years ago | (#27143417)

There seems to be a disconnect here. When the issue is one of an ability of a State government to pay its bills which it uses Federal money to do, - and the money stops - there are two choices:

1 - find the money (that means taxes)
2 - stop the program

It's all well and good to shrug and say "not my problem". When the roads are crumbling and the bridges falling down, my guess is that Americans at all local and state levels may share another view.

By the way, issuing long term debt and deficit financing are two different things. A state that does not issue a security to the public to finance a debt does not mena that they have not borrowed from finacial institutions to accumulate debt. Most do. Some do both. I doubt California, for exmaple, shares your sunny "not our problem" optomism.

Re:Tax digital downloads and amil order products? (2, Insightful)

girlintraining (1395911) | more than 5 years ago | (#27142813)

I think you misunderstand our method of government. Unlike most "western european" countries, our government is based on a division between the county, state, and federal levels. And it's not a clear division either. For example, a federal law trumps a state law, unless it happens to be in the state constitution, in which case only the federal constition can override or restrict it. You might imagine what merry hell this plays on our justice system (give you a hint: Everyone in this country is a felon, it's just that some of them haven't been caught yet). The law books are just that damned dense, and have that many competing administrations. And laws are rarely, if ever, repealed. Now, imagine how hellacious that is, and multiply it by a hundred and you have the tax codes in this country.

It's not about tax as a percentage, or tax of a certain good or service, but simply knowing what to pay in. The tax code has become so horribly complicated that nobody wants to fix it, so they throw monkeys at it and they flip levers and switches and hope that it dials into the desired amount of income. It never does. Recently they approved a federal tax on cigarettes, one of a variety of so-called "sin taxes" that we knew the democrats would push forward as the solution to the deficit (if you're a minority of some kind or another -- prepare to be taxed. Alcohol is safe for now though because everybody drinks in a crap economy). Next they'll be taxing food with "trans fat" in it, and other acts of sheer idiocy, and the pattern will continue.

You have this attitude that if you sprinkle magic european-thinking fairy dust over america there problems will all be solved. That's really naive. The current state of affairs is a byproduct of how this country's government is structured, and while at times it irritates all of us, it is all about tradeoffs. As I'm sure you're discovering across the pond right now, the European Union is a giant clusterf--k of monumental proportions. Our country did the same thing -- and then we abandoned that system of organization and created the US Constitution. The European Union is experiencing many of the issues our country dealt with 200 years ago -- which is, how do you organize a number of autonomous and sovereign member states into a cohesive whole? There must be a balance struck between the power of the central authority, and that of its member states.

Our balance point may not be perfect, but it's been around for 200 years. I doubt the European Union will last another twenty. For starters, their constitution is way too long. ;)

Re:Tax digital downloads and amil order products? (1, Troll)

rtrifts (61627) | more than 5 years ago | (#27143195)

First, I'm a Canadian. I live in a federal state system, same as you do, ok?

Second, I'm a lawyer. I understand how parmountcy and shared field theories of constitutional law work (probably much better than you).

Third, I don't give a rat's ass about how you go about fixing your domestic problems or how you fix your fiscal policy. That's because they are not mine to fix; they are YOURS to fix. Find your own unique American solution, by all means. Take as much American excpetionalism as you can carry; fill your boots.

Fourth, I'm not naive about sprinking rational liberal Western European pixie dust over Middle America. I don't think for **one moment** that America's political culture is going to change. America has never been terribly rational about taxes and that it not going to change.

Which is exactly my point: that's why the ultimate tax bill will get only bigger before you are left with no other choice but than to pay it. But make no mistake, Western European pixie-dust or no, the bill comes due. Whether you like it - or not. The bill doesn't care much about why you incurred it. It only wants to be paid.

And that "some day maybe far off in the future" day of bill paying? It's on the horizon and it is a lot nearer than you think.

Re:Tax digital downloads and amil order products? (0)

Anonymous Coward | more than 5 years ago | (#27143607)

First, I'm a Canadian. I live in a federal state system, same as you do, ok?

No, you don't (and I'm a canuck). The powers of a Canadian province are far less than the powers of a US state. Not long ago, when the government of Ontario was talking about banning firearms, someone had to point out that the criminal code is exclusively a federal area, so a province can't do that.

Third, I don't give a rat's ass about how you go about fixing your domestic problems or how you fix your fiscal policy. That's because they are not mine to fix; they are YOURS to fix. Find your own unique American solution, by all means. Take as much American excpetionalism as you can carry; fill your boots.

You should care, they are Canada's problems as well. Given that Canada is the USA's largest trading partner, and vice versa, a recession in the US is going to have dramatic effects in Canada.

Re:Tax digital downloads and amil order products? (0)

Anonymous Coward | more than 5 years ago | (#27142887)

I live in Canada

When the shit does finally hit the fan the biggest customer of your cattle, energy, labor, oil and practically everything else Canada produces will vanish. Despite your discipline and rigorous public governance you're still going to be screwed.

That's the price you will ultimately have to pay...

...for relying on the American consumer.

Enjoy.

Oh, and when Obama gets around to renegotiating NAFTA, try not to whine too much. It's not a big deal.

Re:Tax digital downloads and amil order products? (1)

rtrifts (61627) | more than 5 years ago | (#27143483)

"When the shit does finally hit the fan the biggest customer of your cattle, energy, labor, oil and practically everything else Canada produces will vanish. Despite your discipline and rigorous public governance you're still going to be screwed"

This is, regrettably, mostly true. Which is why watching your public policy decisions over the years is something we pay very close attention to in Canada. And it does, in fact, scare the shit out of us.

Re:Tax digital downloads and amil order products? (1)

AnotherJake (831470) | more than 5 years ago | (#27143135)

You simply will not have a *choice* but to increase taxes in the USA to at least Canadian and possibly Western European levels if you don't deal with it soon enough. (My bet - you won't deal with it soon enough. Americans are nutty when it comes to taxes.) You'll put it off and put it off and then put it off somemore until there is no wiggle room left at all. And then you will point fingers at your politicians - instead of you the voters - which is *precisely* where the blame will lie.

No, it really is the politicians' fault. They flat-out lied to us (over and over). Bush literally told us that it would be wrong for any country to invade another country without just cause, a clear goal, yada yada... The Republican party said they wanted to lower taxes and make government smaller and do less spending. All they did was largely lower taxes on the rich (because they thought that would make things better, which it clearly did not) and then did the exact opposite of what they said they'd do with everything else, which in my view qualifies as pure lies. That doesn't exactly put the blame on the voters in my opinion. So yes, fingers are being pointed at the politicians because they are nearly all liars, crooks and criminals of the highest order.

I don't know how it is in Canada, but our tax system here in the US is unjust, and insanely complex. We don't mind paying taxes because we all know the roads need to be paid for by someone, but our government taxes us for roads, and then later changes their mind and spends it on wars and making new government agencies to bully its citizens with, which is not what we voted for in the first place. Then they confiscate our wealth with deficit spending, which is even worse than taxes. Now our income is worth less because the cost of goods is more. Then they need more money (because they made it less valuable, remember) and tax us from any new angle they can find, which even further increases the damage they did by printing more money in the first place. It's a vicious, and stupid cycle which has absolutely nothing to do with our "nuttiness" about paying taxes.

Re:Tax digital downloads and amil order products? (1)

arminw (717974) | more than 5 years ago | (#27143291)

....That's the price you will ultimately have to pay for spending money for decades that you simply do not have....

That is pure and unadulterated BS. We here, as most Americans cannot spend more money than we have or can borrow. Most credit cards have a limit. You also forget, that someone who has the authority to print money, (or program computer bits in a financial system) without going to jail, can never go bankrupt. Throughout most of human history, the medium of exchange we call money has always had some intrinsic value. This has no longer been true for the last 80 or so years, but instead its value is defined arbitrarily by those that have taken the authority upon themselves to create money out of thin air. One day, perhaps soon, this whole system of funny money will collapse under its own weight of worthlessness.

The problem is, that nobody is sure what this collapse will look like. Maybe it will be like it was with my grandmother in Germany. She told me of a man in her town that took a wheelbarrow full of money to a bake shop in order to buy a few loaves of bread. While he was inside inquiring where to bring the money, somebody dumped the money on the sidewalk and made off with a wheelbarrow.

Re:Tax digital downloads and amil order products? (2, Insightful)

rtrifts (61627) | more than 5 years ago | (#27143615)

I well understand the overall complexities of monetary policy. Spending money you do not have means borrowing it. You didn't have it, now you borrowed it. There. No you have it to spend.

We're clear on that part, right?

I'm not talking about pating the mortgage and groceries. Governments don't work that way. But in the end, they entire monetary system still depends upon governments paying it back - and being charged interest in the meanwhile.

At the ned of tha day, when the interest on your debt forms such a great portion of your overall budget that it squeezes out vital programs, you will have no choice but to raise the tax. There is a level of service that people will not accept being cut-off. The bill comes due.

Put another way, the people you borrow the money to fuind the difference between what you collect and what you spend? They want their interest. That's the deal. They'll probably float the pricnipal again, but that only goes so far. Time comes, they want it for other things, too. Like, say, buying stuff for themselves instead of lending it to America. That's the problem about looking to china to fund your deficit (a problem tied to a very undervalued Chinese currency, doubtless) but there it is just the same.

Fiscal and Monetary policy is easy when you owe most of the money to yourselves internally. But America crossed that Rubicon long, long ago. There is a very real price to all of this.

Re:Tax digital downloads and amil order products? (0)

Anonymous Coward | more than 5 years ago | (#27143585)

Maybe we should collect taxes from you. While you were ice skating in your northern paradise of universal health care, we were arming ourselves to the teeth to contain the many countries with insane governments. The fact is that the standard of living in most of the USA is lower than that of Canada and Western Europe, so new taxes are a big deal.

I Wonder... (1)

elemnt14 (1319289) | more than 5 years ago | (#27142511)

How the impact of tax will affect purchases? Since people might be reluctant to pay extra money for taxes (especially in this economy), will they then be discouraged to buy online, or will it be insignificant enough to not care? How about paying taxes and shipping?

Re:I Wonder... (0)

Anonymous Coward | more than 5 years ago | (#27142875)

How the impact of tax will affect purchases? Since people might be reluctant to pay extra money for taxes (especially in this economy), will they then be discouraged to buy online, or will it be insignificant enough to not care? How about paying taxes and shipping?

Taxation has always curbed a certain amount of trade. I don't have to cite a source, as I would consider it common sense.

For YEARS we used to have zero tax on services (in Canada). The federal government had to put a stop to that in the early 90's. I mean, seriously, all that trade happening without being taxed? The 7% GST (goods and service tax) was born. Of course, the 8% PST (provincial (retail) sales tax, which also, yes, does cover "goods") wasn't eliminated. So, that's 15% on top of pretty much everything anyone buys. (As an aside, electoral promises were made to eliminate the GST, but, of course that didn't happen, and it was only reduced to 5% about a year ago)

A decade or so after introduction, around 2002, the PST guys were jealous that the GST guys were getting all this money for services. So...you guessed it...they started charging on services too. As a computer guy, I have to charge PST on on-site technical services. I expect that will leech into other services over time. And yes, some people balk at the idea, but there's nothing I can do. The government taxes us, and we pay it.

There IS however, something WE can do. Everyone needs to act together, and purposely stop paying the government for things we believe aren't fair.

They can't put everyone in jail...not because it isn't right, because governments do many things that aren't right...it's because if they did, they'd make $0...THAT is the real power.

I digress.

Already taxed in EU (1)

cdrguru (88047) | more than 5 years ago | (#27142541)

In most EU countries there is a 17% VAT tax on electronic downloads. Has been that way for a couple of years.

Why shouldn't it be taxed in the US?

Re:Already taxed in EU (5, Insightful)

Chabo (880571) | more than 5 years ago | (#27142585)

Because there's no "value added" by introducing a Value Added Tax.

Why should a business transaction be taxed simply because it happened? Taxes are meant to give the government the bare minimum of income necessary to conduct government business, not to punish people for spending money they received in exchange for their labor.

Re:Already taxed in EU (1)

Killer Orca (1373645) | more than 5 years ago | (#27142929)

Because there's no "value added" by introducing a Value Added Tax.

Why should a business transaction be taxed simply because it happened? Taxes are meant to give the government the bare minimum of income necessary to conduct government business, not to punish people for spending money they received in exchange for their labor.

I agree with you in spirit. But as the recession has shown our economy is built on a foundation of sand. Since Consumption and Government Spending are two large factors driving the economy whenever the Government cuts back it adversely effects the economy; they can't spend forever though that money needs to come from somewhere. Unfortunately people either: 1. Don't want to hear with it, 2. Don't want to deal with it or 3. Want to do something but end up doing nothing because changing the bureaucracy to be more efficient is a ridiculous task. I think we can only expect more of these taxes to become a reality as time goes on.

Re:Already taxed in EU (1)

Vectronic (1221470) | more than 5 years ago | (#27142623)

Because the USA isn't the EU?

Just because something exists in another country, doesn't mean it should be a world-wide trend.

I live in Canada, we have a maple leaf on our flag, why shouldn't there be a maple leaf on the US flag?

Re:Already taxed in EU (1)

CannonballHead (842625) | more than 5 years ago | (#27142841)

Because we buy our syrup from you? :P ;)

Re:Already taxed in EU (1)

ZorinLynx (31751) | more than 5 years ago | (#27143331)

Do you Canadians pay GST/PST on Internet downloads? Or at least GST?

Just wondering since you have to pay it on pretty much everything else.

Re:Already taxed in EU (3, Informative)

Vectronic (1221470) | more than 5 years ago | (#27143533)

Yes and No... it depends on the Province, the size of the company, and wether you are selling in-province or out-of-province, in some it's 0, in others its anywhere from about 5% to as high as 18%.

Selling outside of country is generally tax free, with exceptions like the EU, where there's some weird translated tax, where 'our' tax of the item gets sent to the EU.

But naturally, because like all governments it's a clusterfuck of weird loopholes, there are ways around almost all the taxes. But I am by no means an expert on it, so if you really want to know, you'll have to look elsewhere.

Re:Already taxed in EU (1)

Burdell (228580) | more than 5 years ago | (#27142721)

The main reason is that sales taxes in the US are only at the state/county/city level, not the federal level. Many years ago, there was a federal court ruling against one state trying to charge sales tax on something bought in another state (I don't remember the details but I'm sure Google does), so mail-order businesses did not have to charge sales tax on shipments to states where they did not have a physical presence.

Also, the way sales taxes are handled complicates collections on mail/web-order sales. For example, I pay 8% sales tax here: 4% to the state, 2% to the county, and 2% to the city. If I buy something online, how is a random merchant (in another state) supposed to know how much sales tax to collect and where to send it? A big business like Amazon could handle it, but it could put small (Mom-n-Pop type) shops out of business (or they just won't sell online). Telling Amazon to collect taxes because they can handle it, while letting the small businesses bypass taxes, would create unfair competition.

Also, what gets taxed varies from area to area. For a long time, my state did not tax computer software and games, because they were not considered a physical sale but a license (for once that concept worked for consumers instead of against). That changed of course as software sales went up. Many states don't tax some types of food and clothing ("essential" items), but the exceptions vary.

Re:Already taxed in EU (0)

Anonymous Coward | more than 5 years ago | (#27143013)

In most EU countries there is a 17% VAT tax on electronic downloads. Has been that way for a couple of years.

Why shouldn't it be taxed in the US?

That's not the question you should be asking. You should ask why it should be taxed in the EU.

Unless you work for the government, then I know why you think everything should be taxed.

Captcha: extort

Re:Already taxed in EU (1)

geekoid (135745) | more than 5 years ago | (#27143163)

Just becasue it's done one way in the EU is no argument for why it should be done here.

good luck. (1)

girlintraining (1395911) | more than 5 years ago | (#27142595)

Let's start with a fact: If you're over the age of 18 and have ever filed taxes, you're guilty of tax fraud. I don't know what law, but I assure you, you're a criminal. Shame on you. Now, that said, they can pass this law all they want... and it will only succeed in chasing any businesses operating in their state that sell software online away. And really, how many skilled programmers are you going to find in Mississippi anyway? Oh, sorry, that might be stereotyping. Shame on me. :) But seriously -- I suggest the British approach to this for my fellow american citizens: See a stupid law? Ignore it.

Someone please help me ... (1)

PPH (736903) | more than 5 years ago | (#27142617)

... figure the Misissippi tax on an Ubuntu .iso download.

Re:Someone please help me ... (2, Funny)

Shakrai (717556) | more than 5 years ago | (#27142677)

Depends on whether or not Microsoft lobbyists were involved in writing the bill ;) If they weren't 8% of $0 = $0. If they were then 8% of $0 = $1,000.

Awaiting (0)

Anonymous Coward | more than 5 years ago | (#27142619)

Photo of the bill [gizmodo.com] on the governor's desk, awaiting...

Use tax (1)

Ghubi (1102775) | more than 5 years ago | (#27142625)

Internet and mail order purchases are already subject to use tax [wikipedia.org] in many states. Not that anyone actually pays it.

porn tax (with apologies to Mr. Heston) (3, Funny)

Shakrai (717556) | more than 5 years ago | (#27142643)

You can tax my porn when you pry it from my wet sticky fingers ;)

and that New York is considering taxing downloads of all kinds.

Way to go, guys! (1)

kimvette (919543) | more than 5 years ago | (#27142727)

Good job, lawmakers. As we all know, the best way out of an economic recession or depression is to increase and create new taxes. After all, the fastest way to economic recovery is to increase the tax burden on citizens!

no nO No NO NO NO!!!!! (1)

Ozlanthos (1172125) | more than 5 years ago | (#27142893)

The way to make money off of the internet is to use it like a highway. Except instead of having ot cart your dumb ass all over hell and back, you could be conducting the business of the day from the comfort of your own home. That is where the money is, it is in the SAVING OF MONEY (a penny saved is a penny earned remember????). The money to be made off of the internet is in having to pay 50% of what you do now to insure the health if your employees. It is in the saving of space on the design of your "robotic" manufacturing plants (occupy less "real" estate, no need for corridors or offices, just a maintenance shop, a front office, and a staff meeting room,where you convene once or twice a month to talk face to face). The internet is the answer to our energy crisis too. Look around you if you work in an office and ask yourself sometime, "what of my surroundings here at work could I NOT DO WITHOUT"? Of those things that you CANNOT DO YOUR JOB WITHOUT, "how many of these things could be provided "virtually"? No doubt there are many of you that need to be on-site as a part of your job, but I bet there are far more of you who can do everything you do now for your company or business, from some cyber-cafe in town. Instead of pursuing this inevitable migration with gusto, it seems most of the US "Economy" is based on the idea that the internet MUST BE EXTORTED FOR EVERY LAST CENT IT CAN PROVIDE. Every time I hear someone on C-Span talking about the internet, the subject matter invariably is "how do we make money off of the internet". Get it straight, THE INTERNET IS NOT "THE PRODUCT". The "PRODUCT" is the service or items you provide others VIA THE INTERNET. The sooner we get away from the "capitalist-extortionist" mindset that currently runs internet related businesses, the sooner we can all make "real" money providing our goods and services to the world... FREE THE INTERNET!!! -Oz

Electrically transferred (1)

Cajun Hell (725246) | more than 5 years ago | (#27142897)

That's the last straw! I'm switching to fiber optic networking.

Bad news (2, Insightful)

fishbowl (7759) | more than 5 years ago | (#27142909)

The bad news is there might be a sales tax on downloads.

The far, far worse news is you are in Missinhippie. Get out while you can.

Sex (1)

Saysys (976276) | more than 5 years ago | (#27142917)

Legalize prostitution then charge everyone for taxes they should have paid on sex they have for "free".

Re:Sex (0)

Anonymous Coward | more than 5 years ago | (#27143509)

No woman likes you enough to have sex with you for free?

Re:Sex (1)

Logic Worshiper (1480539) | more than 5 years ago | (#27143521)

Legalize marijuana and tax that too.

Government is the biggest vulture (1)

elloGov (1217998) | more than 5 years ago | (#27143009)

This pisses me off. No good reason to tax this but to just further profits. Give me a logical reason why software should be taxed. Why does the government deserve a piece of the action? I'm not against taxes, it's just got to be logical.

just books, music and movies (0)

Anonymous Coward | more than 5 years ago | (#27143059)

The way I read the bill, it appears that only digital books, music and movies are taxed: (a) "Specified digital products" means electronically transferred digital audio-visual works, digital audio works and digital books.

Mississippi Bill? (5, Funny)

twoDigitIq (1352643) | more than 5 years ago | (#27143073)

Who the hell is "Mississippi Bill" and why does he care about software sales? He should probably devote more of his time to planning his upcoming battles with Minnesota Fats and the Cincinnati Kid.

Mississippi Bill (1)

reSonans (732669) | more than 5 years ago | (#27143097)

Reading the story title, I thought this article was going to be about a colourful, wacky American named "Mississippi Bill." Drag that it isn't... :)

Re:Mississippi Bill (1)

Garbonzo00 (1011279) | more than 5 years ago | (#27143141)

Hah. Yeah, I thought the same thing. Like Tennessee Jed.
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?