New tax set to raise costs of digital downloads
by Amanda Miller 
Feb 27th 2009 at 9:00AM
Once upon a time, digitally distributed content, such as downloaded copies of WoW and its expansions, allowed customers to avoid the sales tax that they would pay if they bought a copy from a store.
This proposed tax is poised to increase the costs of downloading music, books, videos, games, and other similar content.
Wisconsin is one of the most recent states to hop on board, adding a 5% tax to digitally distributed goods. One of the opponents, State Rep. Scott Suder, commented, "it's basically taxing students to fill in the Doyle budget shortfall, and I think that's unfair."
This tax will also affect families, and in these economic times, further taxing the people may not be the best way to drum up state funds.
Steve Delbiano from NetChoice, which encompasses Ebay, Aol, Yahoo and many others, points out that this tax is anything but environmentally friendly.
"With global warming and a world that's running out of oil, the last thing governments should do is add taxes on something that uses no oil and produces no carbon. A digital download is the greenest way to buy music, movies, and software, since it requires no driving to the store, no delivery vans, and no plastics or packaging."
The ECA, or Entertainment Consumer's Organization, a voice for the people, is leading a campaign against this tax, rallying in New York, Washington and Mississippi.
China recently chose a similar route. Instead of adding a sales tax, they imposed a 20% income tax upon digitally distributed goods, resulting in sweeping price increases.
Unfortunately, this trend might be here to stay.
Filed under: Analysis / Opinion, News items
Reader Comments (Page 1 of 3)
Jase Feb 27th 2009 9:06AM
"something that uses no oil and produces no carbon"
Has he ever heard of electricity generation? lol
Sal Feb 27th 2009 9:15AM
He means that the downloads use no oil unlike driving where is uses oil and produces carbon. Come on man, read it before commenting.
Jase Feb 27th 2009 9:18AM
My point was that nothing is carbon-free... his point should have been that it's low-carbon, not no-carbon. Digital technology requires vast amounts of energy - both to create the infrastructure and to maintain services.
Why should online retailers dodge a sales tax which bricks and mortar stores have to pay anyway? Mom & Pop stores should be so lucky :)
Jeriel Feb 27th 2009 9:16AM
That did seem like a pretty lame argument. Taxing it seems pretty fair, it's a business that generates income after all.
Jeriel Feb 27th 2009 9:17AM
Tsk, this was in reply to Jase. Damn your commenting system wowinsider.
Scott Feb 27th 2009 9:21AM
It may be a business that generates income, but I'm happy not paying the tax off something that doesn't require anyone to do anything.
At least if I buy it in a store it feels like I'm paying for something with my tax.
Jeriel Feb 27th 2009 9:26AM
But everybody did something to provide you with the product/service. Someone made the product and is selling it, so it gets a sales tax.
More and more people have to get out of the mindset that buying things on the Internet is not actually "buying" anything real.
taldon Feb 27th 2009 9:32AM
This is CHANGE. Lulz @ the Obama voters.
Viper007Bond Feb 27th 2009 9:34AM
How in the hell is that relevant to anything? Stop being a troll. You aren't even old enough to vote.
037 Feb 27th 2009 1:00PM
The Truth Commission has deemed your swipe at Dear Leader to be unwarranted.
Please report to the nearest re-education camp for community indoctrination procedures.
el ranchero Feb 27th 2009 2:23PM
Yes, because Barack Obama is president of the Wisconsin state legislature.
odgit Feb 27th 2009 9:27AM
You are paying for something with your tax Oo, you are paying for the police, firemen and all the other stuff the government is covering. Taxes are a means of generating the income needed to keep a good infrastructure going.. obviously some of it gets wasted along the way but hey ;) cheers from socialist Norway i suppose
Stahl Feb 27th 2009 10:56AM
Sure we are getting things from paying taxes, as you said: fire, police services, and a host of other services. What I don't like paying for is the parasite class sucking resources from the people that actually work and contribute to society.
The less taxes the government collects, the less likely that they will spend money on the parasite class, it's as simple as that. This of course doesn't seem to apply to the federal government as they will spend money whether they have it or not.
Antistes Feb 27th 2009 1:21PM
"What I don't like paying for is the parasite class sucking resources from the people that actually work and contribute to society."
The parasite class? It's nice how you invented a whole new social class there. What constitutes a member of that class? Is it your 75 year old grandfather who is now "sucking resources from society" since he can't work anymore? Is it the miner who got chronical obstructive lung disease at 45 due to inhaling dust and can't climb the stairs to the library? Or is it you When/if you loose your job someday or get too old to be able to contribute financially?
The "parasite class" is a paranoid idea, a straw man. Sure there are people (of all classes) that use the system, but seriously in any reasonably corrupcy-free nation this is not a big issue.
And on another note, contributing isn't always about working and generating revenue. Soft values are truly important in times like these.
Sei Feb 27th 2009 9:27AM
"With global warming and a world that's running out of oil"
I didn't think people still actually believed this.
Nick Feb 27th 2009 9:33AM
Yeah, there are stupid gullible people still around.
Viper007Bond Feb 27th 2009 9:35AM
You're right. There's infinite oil. Silly scientists, what do they know?
Liel Feb 27th 2009 10:35AM
Oil is infinite???
Tuhljin Feb 27th 2009 11:28AM
Way to miss the point, set up a straw man, and hurl insults at those that dare utter known facts that call your pet views into question - all in a sentence or two, each. Did he say it was infinite? Wait, why am I trying to argue something remotely related to politics on the Internet?
0bsolete Feb 27th 2009 12:35PM
The whole global warming scare, well, scares me. Mostly because of how many people believe it. And if enough people believe it, it gains power. Its not even considered theory anymore. Its like the earth being flat.
Anyways, taxing digital downloads was a natural extension. There is money for the government to make from it, it's only a matter of time until its done.