State Legislature Attempts to Tax All Digital Downloads

Greg Tito

PR for Dungeons & Dragons
Sep 29, 2005
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State Legislature Attempts to Tax All Digital Downloads



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

The first time I bought something online - I think it was Civ V on Steam [http://www.amazon.com/All-Timing-Fourteen-David-Ives/dp/067975928X] have been sacrosanct. Connecticut lawmakers want to change all that by passing a bill to amend the tax code so that the government can tax every digital exchange, including movies, TV shows, and yes, games. Or at least that's what I think "digital audio-visual work" means.

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

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

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

Head over to the ECA if you happen to live within the tiny Nutmeg State [http://action.theeca.com/p/dia/action/public/?action_KEY=5662], or just want to learn more.

Source: CT.gov [http://www.cga.ct.gov/2012/TOB/S/2012SB-00400-R00-SB.htm]

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gigastar

Insert one-liner here.
Sep 13, 2010
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Ah, finally a legal proposal thats easy to make sense of that we can as a community piss all over.

ForgottenPr0digy said:
I think that bill got shut down bunch gamers went on twitter to protest it.
Erm, care to add more words to that in order to get it to make sense?
 

Jonci

New member
Sep 15, 2009
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Personally I have no issue with state-based internet sales tax. With the popularity of online purchases versus in-store purchases, states are losing sales tax revenue, which means they'll eventually either need to deal with online purchases or increase local income or property taxes. And I prefer commericalism to be the point of taxation rather than the state coming after me for having a car I need to have.
 

Realitycrash

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Dec 12, 2010
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I don't get it, why SHOULDN'T you pay tax for something that is obviously a service or product?
 

Bob_F_It

It stands for several things
May 7, 2008
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The Senate is merely plugging a tax loophole; why the ECA thinks they deserve special treatment is unclear to me.
 

KeyMaster45

Gone Gonzo
Jun 16, 2008
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I don't see an issue here (other than maybe it doesn't target all online sales). Honestly I don't see why there isn't already a federal law in place that says when you buy something online you pay sales tax equivalent to where in the country you live.
 

Andronicus

Terror Australis
Mar 25, 2009
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Greg Tito said:
The proposed bill hits home for the gamers who work there because the offices of the ECA just happy to be in Wilton, CT, and would therefore be subject to this taxation.
Umm, I don't want to be that one guy, but it's really early in the morning here, and this mistake forced me to reread the entire paragraph several times before my caffeine deprived mind clicked as to why everyone was so damned happy about all of this. At this time of day, my brain really doesn't have the capacity to compensate for misspelled words.

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

DevilWithaHalo

New member
Mar 22, 2011
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You pay a sales tax when you buy a videogame in the store... so what's the problem with paying sales tax for the same game online?

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

teebeeohh

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Jun 17, 2009
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wait why wouldn't you pay taxes for that?
not saying that a sales tax is always necessary but if there is one in place why wouldn't it apply to digital goods.
 

Magnalian

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Dec 10, 2009
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I can imagine the ECA not being too happy about this, but is an 8% sales tax really that big a deal? The government does need to get their money somewhere.

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

xedobubble

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Apr 2, 2009
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Honestly, considering that taxes fund pretty awesome things like schools, libraries, police, and maybe health care if the next wave of republicans doesn't repeal it, paying taxes on things I buy isn't that horrific a thing. But since I don't know tax law, I'm a little concerned about how this works. Am I charged based on the state I'm in, the state where the business is run from, maybe even the state where the data is stored? And how would it affect international e-commerce?

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

Tipsy Giant

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May 10, 2010
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separate taxes for each state is dumb.
With that out of the way, of course they should be taxed, it's not like the savings are passed on to you and who do you think the tax money get's spent on, you, that's right.

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

Steve the Pocket

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Mar 30, 2009
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Interesting. I suppose this would have to apply to in-game store downloads like Valve's Mann Co. store as well. That'll make things nice and complicated, won't it. I guess Steam already requires users to have their full addresses stored in the system anyway for legal reasons, so it wouldn't be too hard to know who all to charge how much extra and where to send it.

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

viranimus

Thread killer
Nov 20, 2009
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Until digital property is treated in the same way as physical property with all the same legal protections that are bestowed upon digital Physical property such as the ability to resell used digital property or not being removed from ones property without recompense, then absolutely not. If the government does not do its job to protect it or the consumers, then they absolutely do not deserve to profit from it.

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

razer17

New member
Feb 3, 2009
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Firstly, why shouldn't you pay tax just because it's digital? It's still a sale.

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

Silk_Sk

New member
Mar 25, 2009
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*sees title*
Hm, some random state is gonna try and tax digital downloads. Well, good luck to whatever state that is, I hope it doesn't pass.
*sees that it's my state*
OH SHI-
*immediately contacts representative*