iTunes Tax

According to the Christian Science Monitor, New York is the latest state considering imposing a so called “iTunes tax.” Currently, 17 states and Washington D.C. have imposed similar taxes with several others, including Wyoming, Washington and Massachusetts, considering it.Online US retailers aren't required to collect sales taxes from customers in states where the retailers don't have a physical presence. Critics of the proposal are warning that such a tax would increase illegal downloads.

Under the New York plan, a 4% tax would be imposed on music and movies downloaded in the state of New York. The tax would obviously effect iTunes, Amazon and downloaded games.

Is the income destined to artists –No.? State budgets have been hit hard by the current recession with revenues falling. A $15.4 billion budget gap is expected in New York alone which obviously fuels the need to raise taxes and fees. 88 tax and fee rises are being planned including raising taxes on clothing, taxis, movie tickets, as well as “digitally delivered entertainment services.”

When we look at taxation on content be it physical , digital or any combination thereof we see a inconsistent application across the globe. We see some wanting to introduce new taxes on the devices that render digital content, the digital content itself and the services that deliver it. In the current economic climate we must expect any governing body to view digital as a soft target in the same way that cars, fuel, and roads became one in the last century. The problem may become one of maintaining the logic that physical books are different.