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Connecticut Considers Digital Download Tax

samzenpus posted more than 2 years ago | from the taxing-the-tubes dept.

Cellphones 244

SonicSpike writes in with a story about the latest state contemplating raising revenues by taxing the net. "Downloading music, movies, e-books and Apps could soon cost Connecticut residents more as lawmakers consider a tax on digital downloads. The bill, proposed by the General Assembly's Finance, Review and Bonding Committee, would have consumers pay the 6.35% sales tax on any electronic transfer. Supporters say the bill would level the playing field for brick-and-mortar retailers in the state who are already required to charge Connecticut sales tax to consumers who purchase these products in their stores. About 25 states around the country have already begun taxing digital downloads."

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what about a frosty piss tax? (-1)

Anonymous Coward | more than 2 years ago | (#39396755)

in your mouth.

Nahh (1)

taktoa (1995544) | more than 2 years ago | (#39396781)

Probably won't garner much support.

Re:Nahh (4, Insightful)

ColdWetDog (752185) | more than 2 years ago | (#39396829)

Couldn't you just use an access point across the street ( and likely in another state) and bypass the whole problem?

Re:Nahh (1)

Anonymous Coward | more than 2 years ago | (#39396923)

Was that a "Connecticut is small" joke?

Re:Nahh (5, Interesting)

wrathpwn (1995376) | more than 2 years ago | (#39397039)

What about a VPN connection to another state? And if that works, would it become illegal?

Re:Nahh (1)

dmomo (256005) | more than 2 years ago | (#39397189)

Sure. If you can manage to lie about your billing address to the site you are downloading from. I'm not sure, but that could be illegal.

Re:Nahh (1)

larry bagina (561269) | more than 2 years ago | (#39397265)

If the site you're downloading from does not have a physical presence in the state, they can't be required to collect the tax, which makes it more of an honor system since it isn't easily enforceable.

Re:Nahh (1)

ColdWetDog (752185) | more than 2 years ago | (#39397383)

Paypal? That would prevent the seller from knowing where you are located, would it not?

Re:Nahh (5, Informative)

readandburn (825014) | more than 2 years ago | (#39397423)

PayPal is never a solution to anything.

Re:Nahh (1)

ColdWetDog (752185) | more than 2 years ago | (#39397517)

Come now, even Google isn't completely evil.

Re:Nahh (4, Insightful)

readandburn (825014) | more than 2 years ago | (#39397585)

PayPal is.

Of course *more* government is the solution (-1)

Anonymous Coward | more than 2 years ago | (#39396789)

Have to pay for it, too.

So what? (2)

owenferguson (521762) | more than 2 years ago | (#39396799)

6.whatever% of zero is still zero.

Re:So what? (2, Insightful)

owenferguson (521762) | more than 2 years ago | (#39396817)

Which is to say, if you're stupid enough to pay real money for ephemeral product, you deserve to pay the tax...

Re:So what? (0, Troll)

Anonymous Coward | more than 2 years ago | (#39396833)

Tax THIS [piratebay.se] , motherfuckers!

Re:So what? (0)

Anonymous Coward | more than 2 years ago | (#39396941)

So only stupid people pay real money for "ephemeral" products?

Do you really want to commit to that position, or would you like to stop and think that through?

Re:So what? (4, Funny)

K. S. Kyosuke (729550) | more than 2 years ago | (#39396989)

So only stupid people pay real money for "ephemeral" products?

I don't know about that, but for sure only ephemeral people pay for stupid products.

Three things... (5, Interesting)

readandburn (825014) | more than 2 years ago | (#39396837)

1) The article is pretty much the summary? 2) "About" 25 other states? They can't even do the research to see exactly how many states already do this? 3) Half the states ("about" anyway) already do this, yet it is news on Slashdot now? Yes, I must be new here.

Re:Three things... (1)

Morth (322218) | more than 2 years ago | (#39397667)

It's been on slashdot before, probably for other states, can't really remember. Frankly, as a European (Sweden to be exact), I'm still surprised you don't have taxes on internet purchases. Any online US retailer exporting to EU does have to add VAT to those transactions (which are then sent off the to EU state).

but Conneticut already taxes this... (2)

Creepy (93888) | more than 2 years ago | (#39396841)

http://blog.ctnews.com/takeonlife/2011/01/22/forget-nickels-the-%E2%80%98use-tax%E2%80%99-could-generate-millions/ [ctnews.com]

Some exemptions are mentioned in that blog, but it misses the "single purchase under $25 is exempt" written on the form itself.

I ALWAYS pay my use tax when it is due (which is rarely due to exeptions, but I have paid it twice) and this sounds like double taxation to me, unless they also change their laws on the books.

Re:but Conneticut already taxes this... (2)

BitterOak (537666) | more than 2 years ago | (#39397817)

I ALWAYS pay my use tax when it is due (which is rarely due to exeptions, but I have paid it twice) and this sounds like double taxation to me, unless they also change their laws on the books.

It isn't. You don't have to pay use tax on items for which you've already paid sales tax. If you pay out of state sales tax on something, you only have to pay use tax if the rate you paid is less than your own state's sales tax and you only have to pay tax on the difference. The tax described here is paid to your OWN state as a sales tax, so use tax wouldn't apply.

I am not surpised (3)

Dolphinzilla (199489) | more than 2 years ago | (#39396855)

if they thought they could tax the air we breath they'd do it....

Re:I am not surpised (0)

Sulphur (1548251) | more than 2 years ago | (#39396979)

if they thought they could tax the air we breath they'd do it....

That air might contain ozone.

Re:I am not surpised (5, Interesting)

hairyfeet (841228) | more than 2 years ago | (#39397047)

But if they didn't how could Sen Porkman and Congressman Kickbackus waste money like drunks in vegas and throw away billions on useless military shit? I mean look at the F35, stealth makes it both a lousy fighter (lack of engagement time due to no external fuel tanks and lack of firepower due to no missile hardpoints) AND a lousy bomber (both the fuel and hardpoints problems) so you'll end up with the F15 having to babysit the damned thing so it don't get its ass kicked, then of course there is the Ford carrier, we already have TEN to the next largest countries TWO but hey, who cares if we are ass deep in red ink,gotta show our military muscles right?

Frankly we could probably lower taxes AND pay for our social programs if we just got rid of really dumb shit. Get rid of the dumbass F35 for more F15s and add some stealth eagles if you want something "stealth", fix the damned border so we aren't wasting billions in law enforcement and security theater when a terrorist could literally drive a rider truck with a bomb right across the border and into any city they wanted, get rid of all the loopholes that let corps like GE pay ZERO taxes on billions in profits, tax the living shit out of the speculators that are constantly flipping stocks and instead reward actual long term investment so that companies can actually do things that will grow their businesses without fear that the speculators will tank their stock price, basically bring common fucking sense back into the system because lord knows we are severely lacking in it ATM.

Re:I am not surpised (1, Insightful)

Anonymous Coward | more than 2 years ago | (#39397129)

"let corps like GE pay ZERO taxes on billions in profits"

You still think corporations whom taxes are levied upon actually pay taxes? No,sir. YOU pay the "corporate tax" everytime you purchase anything made and sold by a corporation. Corporate taxes are merely another vehicle your beloved federal government has come up with to fleece the citizen at the end of the purchase. Since you apparently understand nothing about how corporations operate, you'll not understand that profits are required to reinvest, and keep the company running, right? Without these evil profits, the corporation goes out of business and you can no longer buy your beloved iPad 8. When the government sphons your profits away via taxation, for your "social programs" (read: Programs that rob Peter to pay Paul, and secure Paul's vote), the resulting American made good cost more, which inhibits competition with similar foreign made goods.

Don't get me wrong - there's plenty wrong with publicly held corporations (disproportionate executive pay, etc...), but the government interference just makes things all that much worse, and costs money and jobs in the end.

Re:I am not surpised (3, Insightful)

TFAFalcon (1839122) | more than 2 years ago | (#39397329)

Do you think prices would decrease if corporate taxes were abolished? No. Corporations would just pocket the money and invest it in more bonuses.

Meanwhile, income taxes would increase to make up for the reduced tax income.

Also, people pass on their taxes to their customers and employers too. So why not have identical taxes for corporations and individuals? Why not tax people on profit instead of income? Why should a person that spends all of his income on basic needs like food and shelter pay taxes, while a corporation that spends it's entire earning on production costs pay nothing?

You might argue that the corporation employs people - but then so does the individual. He keeps farmers and his landlord employed at the least.

Re:I am not surpised (2)

maxwell demon (590494) | more than 2 years ago | (#39397237)

"How did he die?"
"He suffocated."
"How could that happen?"
"He tried to save taxes."

Not actually a DL tax (0)

Anonymous Coward | more than 2 years ago | (#39396863)

It is simply a online sales tax, downloading doe not sound like it enters into it.

How (3, Insightful)

wisnoskij (1206448) | more than 2 years ago | (#39396889)

How do they actually make these online taxes work? force every single online payment gateway to tax every transaction from your state and send you the money?

Re:How (2)

vintagepc (1388833) | more than 2 years ago | (#39396985)

See, therein lies the catch - they can then sneak in a tax on your ISP bill to help fund the infrastructure required to implement this, and make even _more_ money! It's win-win for everyone except the end-user.

Re:How (1)

dmomo (256005) | more than 2 years ago | (#39397199)

I don't think that has anything to do with this story. The article says nothing about taxing at the ISP level. It's a legitimate concern, but not what we're talking about here. Cut with the FUD.

Re:How (0)

Anonymous Coward | more than 2 years ago | (#39397215)

*Whooooooosh* Apparently the joke is lost on you.

Re:How (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397133)

Why is this such a hard concept to grasp? When you buy something on your phone you're already charged and given an invoice. Now they just added tax to that like any other transaction.

So unless you're going to commit tax fraud, Turbotax is all they'd need to comply. This is already in place, and working fine, in Washington state.

Re:How (1)

wisnoskij (1206448) | more than 2 years ago | (#39397169)

It is not hard to grasp, it is hard to accomplish. All brick and mortar stores that pay sales take to a given state reside in that state.
Imagine if the sales tax instead of being on a location basis changed to a personal basis. So if a Connecticut citizen took a holiday to Italy and bought a $10 sandwich then 60 cents had to be taxed and sent Back to Connecticut. How would you go about accomplishing this?

Re:How (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397253)

Simple

If a person isn't forming a contract for digital goods with a company recognized as being inside of Connecticut; no tax. If a person forms such a contact with a business that is recognized as being in Connecticut; Tax on

Re:How (1)

wisnoskij (1206448) | more than 2 years ago | (#39397349)

I don't think the idea to to tax online Connecticut businesses but to tax Connecticut citizens online. This bill and all like it are for taxing citizens on all online purchases.

And online businesses do not really have a location, Google or amazon have to have their servers somewhere but the location is immaterial.

Re:How (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397403)

Unless Connecticut is home to magical wizards they're going to tax this like any other state does, and so all online digital goods purchased from companies recognized as being in Connecticut will be taxed.

That is not true at all. Every corporation has to incorporate in a specific state, and hence in bound by laws of that state.

Can I pay (3, Funny)

koan (80826) | more than 2 years ago | (#39396907)

in Bitcoin and Quatloos

"Levelling the playing field" (3, Insightful)

J'raxis (248192) | more than 2 years ago | (#39396909)

"We steal from these guys over here. So we should steal from you, too."

Naturally the brick-and-mortar stores are going to favor fairness in the application of the tax laws. But why do we never see them saying, "You don't tax all these business, so stop taxing us?" Or, "Taxing these businesses is going to double your tax base, so how about cutting the tax rate in half?"

No, instead, the government wants more money and more control over a greater number of people and businesses. So they sell it to local businesses as "levelling the playing field" and these businesses eat it right up and support the ever-increasing growth of government.

Re:"Levelling the playing field" (-1)

Anonymous Coward | more than 2 years ago | (#39396929)

Boy, the Tea Party is running wild on Slashdot today "don-cha-know". Go polish your guns.

Re:"Levelling the playing field" (1)

DogDude (805747) | more than 2 years ago | (#39397051)

You don't hear brick and mortar businesses arguing for repealing sales taxes because most people know that's never going to happen. They are necessary.

Re:"Levelling the playing field" (1)

kidgenius (704962) | more than 2 years ago | (#39397125)

They are necessary.

They are?! I guess I must've missed the part where the states that don't charge sales tax have completely imploded and have been annexed by their neighboring states?

Re:"Levelling the playing field" (1)

J'raxis (248192) | more than 2 years ago | (#39397373)

"Necessary"? I guess New Hampshire never got that memo, because we have no sales (nor income) tax. Many times they've tried to pass one; each time it's failed. Often these politicians don't get re-elected, either.

Re:"Levelling the playing field" (1)

OhPlz (168413) | more than 2 years ago | (#39397497)

Often these politicians don't get re-elected, either.

Although sometimes they get elected US senator. With any luck, we'll pass an amendment to the state constitution to make those taxes even more unlikely.

Our state politicians are like car salesmen (yes, a car analogy!). "Well, by enacting a small sales tax, we won't have to raise property taxes nearly as much." In the end, we pay more anyway. All a granite stater has to do is look at our southern neighbor.

Re:"Levelling the playing field" (1)

J'raxis (248192) | more than 2 years ago | (#39397957)

Although sometimes they get elected US senator. With any luck, we'll pass an amendment to the state constitution to make those taxes even more unlikely.

Fortunately they can sometimes do less damage as a U.S. Senator. Two recent examples: I'd rather see former A.G. Kelly Ayotte as a Senator---one voice in 100--rather than leading the prosecution of innumerable victimless crimes. (Although I was part of that "Not Ayotte" campaign: Best of all would be for her to disappear into obscurity.) Similar with former Manchester Mayor Frank Guinta. He's one voice in 435 now rather than bloating the Manchester Police Department all the while claiming to be a small-government conservative.

Our state politicians are like car salesmen (yes, a car analogy!). "Well, by enacting a small sales tax, we won't have to raise property taxes nearly as much." In the end, we pay more anyway. All a granite stater has to do is look at our southern neighbor.

Yup. They might even be clever enough to lower property taxes for a couple years, but within a few years after the income tax were to pass, the tax rates would be just as high as they had been.

Someone I know in Grafton recently found one of their property's tax bills from 1912. The total tax? $16. Accounting for inflation, in 2010 dollars, that would be $356.80. Yet, what's his current property tax bill? $3,000---a 740% increase in real terms.

Re:"Levelling the playing field" (-1)

Anonymous Coward | more than 2 years ago | (#39397147)

No matter how often you repeat it taxes are not theft. Either vote or move to Somalia so you can leave us alone with your childish nonsense.

Re:"Levelling the playing field" (-1)

Anonymous Coward | more than 2 years ago | (#39397191)

it's theft. it's just a mass of retards ganging up on the rest of us to fund the miltary/industrial/retard complex they need to pollute and destroy us into extinction. without taxes we couldn't support our exponential/suicidal growth curve.

Re:"Levelling the playing field" (-1, Troll)

Anonymous Coward | more than 2 years ago | (#39397377)

Ahh, the move to Somolia card. Look retard, Somolia is full of niggers and therefore crime. If it was full of white people, had strong property rights and an equal rule of law, people would gladly move.

Re:"Levelling the playing field" (1)

Anonymous Coward | more than 2 years ago | (#39397479)

Yeah, but then it would have taxes.

white people + strong property rights + equal rule of law = taxes

Re:"Levelling the playing field" (1)

J'raxis (248192) | more than 2 years ago | (#39397813)

If you take something from someone without their permission, it's theft. This is a rather simple concept. Calling yourself "the State" doesn't change the simple meanings of simple words.

I do vote. I do a lot more [jeremyjolson.com] than just vote, too. I have moved---to New Hampshire [freestateproject.org] , not Somalia---because of my philosophical beliefs. Last week I was even part of a group [eprci.com] that defeated $24M worth of new theft that our public school district was proposing.

i already pay tax on app store (0)

Anonymous Coward | more than 2 years ago | (#39396921)

Here in NJ I already pay state sales tax on "digital downloads" I buy from the app store so are they going to try to tax people twice? Sounds like a bunch of fucking bullshit to me. Maybe "brick and mortar" stores need to set up a online presence and sell to people in other states then? Fuck this bullshit. I don't mind paying some taxes because that pays for "civilization" but there's a certain point where it just becomes a rip off.

Re:i already pay tax on app store (0)

Anonymous Coward | more than 2 years ago | (#39396951)

That point was passed long ago in a galaxy far away.

Re:i already pay tax on app store (1)

larry bagina (561269) | more than 2 years ago | (#39397527)

Can you believe it? It's almost as if Connecticut is not New Jersey and Connecticut tax laws are not the same as New Jersey tax laws and Connecticut sales tax doesn't apply to digital downloads but New Jersey sales tax does!

Texas does this (3, Informative)

LittleBigScript (618162) | more than 2 years ago | (#39396957)

Apple aleady does this in the App Store when I purchase in Texas. If I purchase an app in another state, Apple still charges me for Texas sales tax. I guess it is a shipment to my home, not to my device.

Re:Texas does this (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397145)

Same for Washington

Re:Texas does this (1)

Hadlock (143607) | more than 2 years ago | (#39397535)

Yes, tax law has always specified that taxes are paid in the locale that the goods are delivered to.
 
I used to work for a company that would ship things nation-wide. We were located in Texas, incorporated in New Jersey, the manufacturer was in Arkansas, shipped to New Mexico and billed to Arizona. New Mexico's state tax laws (the shipping address) were the ones we followed.

Re:Texas does this (0)

Anonymous Coward | more than 2 years ago | (#39397575)

Here is the deal. You are suppose to pay taxes to the state for out of state purchases that did not charge you tax. (online/magazine order) The company must charge state tax if the company has an office in your state. I don't think it matters if the item is digital or not.

Empty Rhetoric (4, Insightful)

lightknight (213164) | more than 2 years ago | (#39397001)

"Supporters say the bill would level the playing field for brick-and-mortar retailers in the state who are already required to charge Connecticut sales tax to consumers who purchase these products in their stores."

An argument could easily be made that the playing field is already level. The advantage of ordering online is one of cost, with typically lower prices and less of a drain on local infrastructure (it costs the state / local government more to provide fire / police protection / emergency medical services / roads / etc. to a few dozen brick-and-mortar stores than to a single warehouse), and possibly hard to get items (ones which cannot be carried locally, for lack of space in a store; commercial space being at a premium). The advantage to brick-and-mortar stores is time, with the more popular items you are typically looking for already in stock, hence the price premium ("I need this item today").

As such, the advantages on both sides balance each other out fairly well.

This tax, of course, is then a simple cash grab. Going off a stereotype of legislatures, we will assume that the state coffers are beginning to, if not already are, empty. As such, someone took a look at things that are considered popular enough to tax (demand is unlikely to change, so it's *free* money they can skim off the top, without impacting the industry; this is also an economics-FAIL, but the people in charge love to hear things that confirm their bias), and barfed up a semi-palatable reason for this new tax.

   

Re:Empty Rhetoric (4, Interesting)

artor3 (1344997) | more than 2 years ago | (#39397131)

Why shouldn't online purchases be taxable? Slashdotters always complain when people demand different laws for things "on the internet". Why is this an exception?

We need to fund the government somehow. Having a mile-wide loophole for purchases made on the information super-highway is archaic and counterproductive. I'd prefer no sales tax at all, since it's a regressive tax, but if we're going to have one, it should be applied everywhere.

Re:Empty Rhetoric (1)

readandburn (825014) | more than 2 years ago | (#39397313)

How *dare* you make sense here.

Re:Empty Rhetoric (2)

Kenja (541830) | more than 2 years ago | (#39397477)

OK. Where do you apply the tax? In the state the buyer lives, the state the file is hosted from, the state the vendor operates out of or all the states that the data passes through? What if the file is not even hosted in the US?

Re:Empty Rhetoric (2)

rsmith-mac (639075) | more than 2 years ago | (#39397895)

This is already a solved problem. The tax is based on the location of the buyer. For all practical purposes the billing address they have on file (if they have a validated credit card) is good enough, though with location aware devices you can always go for more precision.

Re:Empty Rhetoric (2)

Overzeetop (214511) | more than 2 years ago | (#39397519)

Taxes, in an ideal world, are levied in response to a need for services.

Examples:

Most property taxes go to fund local schools, police, fire, and local public services. While your consumption may not be proportional to the value of your real estate, it becomes a relatively fair basis for taxation.

Motor fuel taxes fund road projects. That one is fairly proportional, since heavier vehicles cause more wear and tear on roads, and generally get worse mileage.

Sales taxes - which are local - pay for local infrastructure related to commerce. In all likelihood, internet sales have little demand on your local services. Digital downloads have nearly zero. There is, generally, no local funding of internet services and - in fact - due to monopoly agreements with some providers the localities are already taxing the infrastructure they don't support (or actively discourage). It's a simple panic attempt to fill waning coffers in a down economy, when proper management would have had them either dropping rates in the mid-2000s or (preferrably) saving the "extra" for the inevitable downturn.

Re:Empty Rhetoric (0)

Anonymous Coward | more than 2 years ago | (#39397617)

Most property taxes go to fund local schools, police, fire, and local public services. While your consumption may not be proportional to the value of your real estate, it becomes a relatively fair basis for taxation.

This is a common mis-conception. No one should pay property tax on their primary residence.
Local funding should be based on Income tax. Currently, there's no incentive for any government
member to keep you employed; or keep local jobs.

Outsourcing U.S. jobs would not be a reality if it directly affected the government's ability to
support itself. Besides, you lose your home if you become ill - poor planning you say only
because it hasn't happened to you or you feel superior. The town can simply take your home
without due process if you're unable to pay your property tax due to an illness. This is the
entitlement the republicans are trying hard to remove from our country - and allow
people to return to productive lives
.

Re:Empty Rhetoric (1)

Overzeetop (214511) | more than 2 years ago | (#39397833)

Most property taxes go to fund local schools, police, fire, and local public services...

This is a common mis-conception

Actually, it's not a misconception - it's fact. Nearly all of your local tax dollars stay in your locality. Most of them pay for a portion of public schools.

If you're arguing with my usage of the term "fair" as a basis for taxation, that may be a bit more understandable. Those who have owned land for a very long time, and have had that land appreciate may have larger than typical tax bills on an illiquid asset. For the most part, though, you chose to purchase real estate fully aware of the proportional taxes which are due. On average (note, I'm not talking about the outliers or anecdotal conditions), people who have the largest real estate tax bills then to have the highest incomes, and visa versa.

you say

Outsourcing U.S. jobs would not be a reality if it directly affected the government's ability to support itself

except that it does affect them, as does all off-shore tax dodges, and yet the government does nothing about it.

Whether you like it or not, the localities provide services based on your mere existence, and how much money you make has little impact on whether you need police, fire, and schools in your town. Income tax is one of the biggest problems, as income is only one way in which people register as a user of services.

Re:Empty Rhetoric (2)

OhPlz (168413) | more than 2 years ago | (#39397567)

Why shouldn't online purchases be taxable?

Why does everything need to be taxed? Don't we have enough forms of taxation already? Would you ever be satisfied so long as there was still a glimmer of capitalism left untaxed? In New Hampshire, we pay mostly via our property taxes. We don't have or need a state sales or income tax. Taxing us two or three different ways doesn't magically create money that couldn't have been collected the first way. All it does is create more bureaucracy, thus necessitating more taxation to fund the bureaucracy.

Online purchases are beyond the state's jurisdiction unless everything takes place within the state. They can demand that their residents pay up, but they can't make demands of companies that don't exist within the state.

Re:Empty Rhetoric (1, Insightful)

BlueStrat (756137) | more than 2 years ago | (#39397577)

We need to fund the government somehow.

Yeah, but how much government do we really need?

So much government that it's costs cripple people & business while killing our competitiveness in a world economy? Enough government to track everyone & everything?

If all we paid for with our taxes was "civilization", we could do away with the Federal income tax and cut most state taxes to nearly zero.

I think we're well past the point of "paying for civilization", and we are and have been, especially in the last several decades, paying for our own enslavement. Paying to pass and enforce so many laws and regulations that no person is innocent, as there is no way to live without breaking some obscure law or regulation, so therefor the government can "crack down" on practically anyone it cares to for whatever reason it desires.

You'll excuse me if I don't share your enthusiasm for paying the costs for my own enslavement. If I can find a way to avoid having the fruits of my labor stolen to pay for the police state, I'm all for it. If the Federal Government wants to pay to put shrimp on treadmills, they can do without a domestic surveillance drone or two instead of raping the public...again.

Strat

Re:Empty Rhetoric (0)

Anonymous Coward | more than 2 years ago | (#39397655)

Go polish your gun, Tea Bagger.

Re:Empty Rhetoric (1)

ArchieBunker (132337) | more than 2 years ago | (#39397781)

Maybe because the law says mail order purchases to out of state companies are tax exempt? iTunes is owned by Apple who are based out of California.

How about instead of finding new things to tax, the government spend more responsibly? Every week I have to do more with less. Why does this all powerful entity funded by ME not have to follow the same rules?

I seriously doubt the fire/police/road departments will be disbanded because of a lack of funds.

Re:Empty Rhetoric (2)

misexistentialist (1537887) | more than 2 years ago | (#39397827)

I'd prefer no sales tax at all, since it's a regressive tax, but if we're going to have one, it should be applied everywhere.

If not no tax then lots of tax? That's some strange logic. Maybe you also think that uniform taxation means a lower and fairer rate, but it doesn't work that way. My state raised sales tax by 25% ("because of inflation" "because other states are doing it" "for the children") and ended up with a budget surplus to blow on vanity projects and contractor handouts, while reducing services and raising fees.

Re:Empty Rhetoric (1)

Imrik (148191) | more than 2 years ago | (#39397891)

They are taxable, in fact they are already taxed, all this does is put the burden on the business to collect the tax. This means that the business has to keep track of sales taxes for every area that has them, even those areas where they have no presence. Since tax codes change along various lines (including within the same zip code) it becomes a non-trivial problem.

Re:Empty Rhetoric (0)

Anonymous Coward | more than 2 years ago | (#39397279)

Excellent point. Of course THAT point about the services is never brought up because if for if it was the tax rate would have to be lowered on the Internet to "level the playing field".

Here is a better idea (1)

JimboFBX (1097277) | more than 2 years ago | (#39397023)

Drop the sales tax entirely and raise income taxes. Problem solved

Re:Here is a better idea (1)

GLMDesigns (2044134) | more than 2 years ago | (#39397083)

Exactly - get rid of the hidden taxes (like raising general funds from the water and sewage bill) and pull all the general revenue from an income tax. Here's another - when you have people do something (collect tolls, pick up garbage) pay all the required bills today (ie pay the pension fund today) and don't push off the bill to the next generation of taxpayers.

Re:Here is a better idea (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397105)

Income tax makes my skin crawl.

I vastly prefer sales tax. Although in this case it really ought to be a flat tax

Re:Here is a better idea (1)

kidgenius (704962) | more than 2 years ago | (#39397153)

Income taxes are a much better solution. Flat taxes are a ridiculous idea because they are regressive. Taxes should be simplified greatly, to the point of where you don't even need to file income taxes every year and you just receive a letter from the IRS stating how much you owe, or how much is owed to you. If you disagree with their calculations, then you file your taxes like today. Get rid of special rates on capital gains and treat it like anything else, income.

Re:Here is a better idea (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397333)

I find it pretty simple that my taxes are clearly stated, and understood before incurring them, on a receipt at the end of each transaction.

As for the regressive nature of the tax; you do know we can buy things out of state? If the tax is so bad for any of the goods I want then I can just go order goods from someone with no sales tax. I've already saved my entire Amazon Prime membership fee in taxes

Alright, and now looking at my taxes and doing what you said.....They're exactly the same

Re:Here is a better idea (1)

Imrik (148191) | more than 2 years ago | (#39397901)

You know you're still required to pay taxes on those things you order from out of state.

Re:Here is a better idea (2)

Overzeetop (214511) | more than 2 years ago | (#39397565)

Flat taxes are an excellent idea, but only if implemented on gross receipts and not on a "net" or "adjusted" income. If every entity in the US paid 5% on their gross income, we could probably run the country. Poor people would get off with a nominal tax bill (a hike from the current negative rate they "pay"). People with several shell corporations to hide assets and limit liability would pay double, triple, or more. Supply chains with short distribution would pay the least tax (think local farmers, who would have almost no markup to account for the tax), those with highly complex business operations would pay more (think of shell corporations that pass through money to low-tax states) causing their end products to be more expensive.

If your real estate agent gets 6% the gross of your house, and your wall street fund manager gets 3.5% of the total funds you have invested - neither of which are affected by how much your net proceeds are, why should the government - who protects your country and keeps the law of the land - only get paid when you happen to turn a profit?

An even better idea - gross receipts tax (2)

Overzeetop (214511) | more than 2 years ago | (#39397539)

Net income is easy to fudge and modify. Gross receipts is whatever you receive. Without deductions, it becomes a "flat fee" for any transaction, paid by the recipient.

Double Taxation (2, Interesting)

ThatsNotPudding (1045640) | more than 2 years ago | (#39397059)

You are already paying a tax on the ISP servcie and the electrical power used, along with sales taxes on the equipment that will play the downloaded media. Time again for some tea-dumping.

Re:Double Taxation (2)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397089)

Not really. You have a contract made with the power company. Another contract you've made is with your ISP. Thirdly, you've made a contract with the music service of your choice to receive digital goods.

All three are separate contracts, and so taxed separately

Sales tax... (5, Insightful)

Roogna (9643) | more than 2 years ago | (#39397111)

I realize the world doesn't work like this. But in my opinion if they're going to tax the purchase it should then fall under all the rules of buying from a Brick and Mortar store too, such as the First-sale doctrine. After all, if I buy a book from a brick and mortar I'm legally allowed to sell that book to someone else. On the other hand, when I download from iTunes I have no way to sell that item, because I didn't purchase it, I "licensed" it. Which the businesses love to remind us. If I'm then being taxed as if I'd purchased it, then the states should require the companies by law to treat it like any physical purchase and allow me to transfer the ownership of it.

Re:Sales tax... (1)

GLMDesigns (2044134) | more than 2 years ago | (#39397355)

Very well said - but then they will argue that this music is a "service" and services can be taxed just as easily as a product.

Re:Sales tax... (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397365)

I'd imagine they think of the taxation as a tax on the service of providing the licensing for the music, rather than a tax on a good taken delivery of.

Re:Sales tax... (1)

Overzeetop (214511) | more than 2 years ago | (#39397525)

Except that you can't apply a state tax to an out of state entity. Hey, the money's gotta come from somewhere, and the only thing they can get to is the end user.

Re:Sales tax... (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397581)

Ummm, yes you can

If you come to Washington and tell your checker, at whichever store you choose, that you are from out of state and so are to be charged no sales tax; you still have to pay the tax

Re:Sales tax... (1)

Overzeetop (214511) | more than 2 years ago | (#39397777)

If I sell you something (I am located in Virginia) via mail - the state of Washington cannot compel me to pay any taxes, either on my work or on your behalf. If I came to your state, I would no longer be out-of-state.

Re:Sales tax... (1)

Eightbitgnosis (1571875) | more than 2 years ago | (#39397949)

It's not a tax on the seller. It's a tax on the buyer. So while I would pay no sales taxes on something bought from Virginia online. You on the other hand would pay taxes on purchases made from a Washington based seller.

Except in a few situations [wa.gov]

Re:Sales tax... (1)

dlgeek (1065796) | more than 2 years ago | (#39397995)

This is a common misconception - sales taxes aren't paid for by the seller, they're paid by the buyer. The seller just collects on behalf of the government.

While it's true that out-of-state entities have no obligation to collect sales tax on behalf of a government if they don't have a physical presence in that state, the tax is still due. It's called a use tax, and it's the obligation of the consumer to report and pay it. Almost all states that have a sales tax also have a use tax, they're just extremely poorly enforced.

Re:Sales tax... (0)

Anonymous Coward | more than 2 years ago | (#39397589)

If you bought a digital copy from a brick and mortar store, they would still charge sales tax for the "license". That has no bearing on the argument of brick and mortar vs internet.

obligatory (0)

Anonymous Coward | more than 2 years ago | (#39397137)

every time there is news about 'some new internet idea', whether from companies or government it just makes the pirate bay option that much more appealing.

cost vs no cost
drm vs no drm
taxes vs no taxes
ect

government and business won't work online until they make a product that can compete with pirate bay

The state needs the extra revenue! (1)

Anonymous Coward | more than 2 years ago | (#39397281)

This is NOT a matter of "leveling the playing field" -- this is a state with a budget deficit that needs to create more streams in income instead of spending less.

Normal citizens like you and I need to cut back on expenses and get rid of unnecessary things like cable TV or a lawn service, but a local, state or federal government instead just increases it's income instead of cutting back.

It would be sweet if you decided to buy that fancy new German sports car but find the monthly payments are more than make from work so you call up the payroll department and have them add a few hundred more dollars into your paycheck to cover things.

Brick and Mortart selling digital goods? (1)

future assassin (639396) | more than 2 years ago | (#39397389)

Where are these stores that sell digital goods? Do you hook up a usb drive to a station, pay and download? How does this work with iTunes cards? You pay tax to buy one and then pay tax again? Double dipping aren't we?

Okay (1)

mcavic (2007672) | more than 2 years ago | (#39397457)

If the web site is operated in CT, then of course they should pay sales tax on digital downloads. If not, then CT doesn't deserve a penny.

The real problem (3)

chowdahhead (1618447) | more than 2 years ago | (#39397475)

In CT, we have the highest state tax on gasoline and among the highest in tax per capita. We probably have the most underfunded state pension fund in the country. The state enacted a tax credit last year that it can't afford, and is being blamed, in part, for the budget deficit we now have. CT has had a spending problem for years, and the answer isn't raising taxes.

Re:The real problem (1)

Anonymous Coward | more than 2 years ago | (#39397757)

I lived in Connecticut when they held a mandated referendum on a state income tax. The vote was overwhelmingly against the income tax; something like 80% if I recall correctly. They implemented a state income tax anyway. The following year the state legislature raised their own salaries, which were already twice what my family of 5 was living on.

another reason (0)

Anonymous Coward | more than 2 years ago | (#39397753)

not to buy a digital song or movie online. Do these asshats want everyone using piratebay?

Brick and Mortar (0)

Anonymous Coward | more than 2 years ago | (#39397961)

Maybe they should look at removing taxes on Brick and Mortar stores completely, and get together with the entertainment industry and find a new way to finance their overspending and greed. Oops, if I hadn't put "greed" in there, it might have actually sounded plausible.

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