Many US states impose a sales tax on goods and services procured in “meatspace,” but what about virtual products purchased and downloaded over the Internet? Digital goods like ebooks, Mp3s, videos, software and cloud services (to name just a few) are a large and growing sector of the economy, and may be subject to duplicative taxes, depending on where the customer, producer, and the servers are physically located. A new video from the Download Fairness Coalition illuminates the complexities of imposing up to 50 different tax regimes on consumers, business owners and the vast digital economy that transcends borders. Take a look:
Last week, Senators Ron Wyden (D-OR) and John Thune (R-SD) introduced the Digital Goods and Services Tax Fairness Act, which would prevent states from imposing duplicative taxes on online goods and services. Read Verizon’s take on the bill here [PDF].