Okay, for those who don't really get this, let me spell it out for you.
As a resident of Connecticut one point here above and beyond anything else is that our sales tax is 6%, an 8% sales tax on digital goods means that the state is demanding the right to charge MORE for a digital product than a physical one. Part of the intent doubtlessly being to punish people involved in purchusing digital goods, to drive them to buying as many of those goods as possible from actual stores.
As things stand there is no real infrastructure in place for Connecticut to track and enforce this tax. This ultimatly means that consumers in Connecticut might very well be put into the awkward position where we can be held criminally liable if we do not keep track of our digital purchuses and hold back 8% of what we spend to report come tax time in case we're ever audited which might be a pain in the arse. Assuming of course the state doesn't put that responsibility on the E-merchants, many of whom aren't set up to track the taxes and such state by state to begin with. A state with a digital tax might very well find itself with merchants that just aren't willing to deal with the state.
This is to say nothing of services that involve point transactions, and how exactly Connecticut is going to say charge you 8% on say 800 Microsoft points, do they go by the value of the product? Do they tax the points themselves? What if I bought my point card out of state?
All of these issues are things that should be addressed and brought up publically before the state even considers creating a law like this, and so far that hasn't really happened. I confess to some concern over how this is going to turn out though, because Connecticut is in an odd position of being greedy and desperate and to be honest our state leadership has never been much for thinking ahead about how it's going to do things.
That said, I have mixed opinions about the state taxing digital "property" since it has no actual intristic value, nor does it's sale really involve much in the way of the state infrastructure. Sales tax being justified by the fact that your using state lands for the trucks that make deliveries, and the state ultimatly winds up paying the police that keep the businesses safe, and maintaining the neighborhoods, and similar things. That arguement doesn't really apply to digital commerce since really the state doesn't have much to do with that infrastructure and is already taxing or cutting deals with the various ISPS and such.
I'd be a little more receptive to the idea of the state taxing E-commerce, if the state was providing me more in the way of services involving it. Right now the state isn't even trying to protect me against companies trying to rape me with their EULAs and IP law arguements to take away what teneous control I have of my purchuses. I mean when the state isn't even willing to force businesses to concede that I own what I pay for (as opposed to simply being allowed to use it until the actual owner says otherwise), it's hard to say that they should have the right to tax me anything.
I don't think a lot of people think about how some of these taxes are justified to begin with. It's easy to see what the state does when physical properties and services are involved, and why it needs to collect monies to keep everything running smoothly. With electronic commerce there really isn't any demands placed on the state infrastructure that aren't already covered by other taxes and arrangements. It's not like the police force protects me from bandits robbing me on the road (funny, but it still applies somewhat if you really think about it) when I buy an app or book for my kindle since I'm not going anywhere or doing anything, and I already paid taxes on my computer, on the building where I set up my computer, and everything else.
It's paticularly ridiculous when you consider they want to charge me MORE taxes for these products that the state does less with to justify why it needs money from this to operate the system.
In the end I'd hope they are shot down, but sadly I expect later today the law might go through, simply because Connecticut will try for the cash grab, and rather wait to see how much trouble it raises. My state pretty much wants the money to add into the coffers in a general sense, and while I agree with the right to levy taxes, I believe just taxes are levied for specfic reasons. Most good taxes have a clear logic behind why you should have to pay them, having to do with the usage of the state infrastructure. Remember a state is NOT a business, it's a servant of the people, it collects money to keep itself running for the public good, the money it collects however needs to be justified, and where regular sales tax on physical property and sales CAN be justified, E-commerce cannot be, especially not to the level of saying it should be taxed 2% more than physical goods.
That's my thoughts on the subject, to be honest I could be persuaded here despite not wanting to pay it, I'd have to hear some very compelling arguements about how the state plans to collect these taxes, and exactly what justifies the collection... what expenses is the state incurring? Collecting taxes to build an infrastructure to collect those same taxes and maintain it is the kind of bureaucratic stupidity that I'd expect this to end with. If the short term purpose is to collect taxes so the money can be fed into other pork barrel projects and so politicians can keep paying themselves large salaries, then no... I oppose that on principle, that is not how one justifies taxing something.
Rambling and repetitive, but that's my thoughts.
