WI Digital DL Tax

[AltruisticCrono]

Doesn't affect me personally per se, but if they extend it to all online purchases from ebay, newegg, etc... then I'd be annoyed.

Link

[ZaCloud]

Hmm... well, as much as I dislike such an idea, I do see the necessity in it, and that's no worse than the sales tax we pay for store-bought stuff anyway.

But... how the heck is it supposed to be a state-based thing? Just from living in the state? But what if you get the download originating on a server in an untaxed state, or even another country? State sales taxes should only apply to the state the business is in, because that's how the business, in turn, pays their taxes right? So this doesn't make very much sense.

How do they expect to keep track of whether you downloaded your content in a taxed or untaxed state? What if you just haul your laptop on over to an untaxed state and conduct your purchase there?

So I guess they're basing it on residence of the individual rather than download location most likely. But that still doesn't make sense in terms of the business getting the taxes.

So if it IS based on the individual's residence, that still makes no sense in the current framework. For example, in Googy state there's no tax on food, but in Wubby there is. I currently technically live in Wubby. So let's say I cross the border and order at a Googy McDonald's. Will they demand an ID so they can see what state I live in and charge me the Wubby food tax since I'm a Wubby resident? That would just be poopy.

So that leaves the tax location as transaction-based. But... that's not correct either, because while the money technically leaves the taxed state, it is received in quite possibly another one (or country) altogether. So that's not technically a specific state-based transaction either.

Like they say in the article, it's obviously complicated. They'd better have an explanation ready though, or the speculation could get rampant. As it is, I'm puzzled as heck about it being "state" and not federal.

[remixedcat]

OMG I think that law is fail. I read about it erlier. and we were thinking about moving there.... grrrr

[The Waffle King]

eh, i dont think its too bad. its not like its massive taxation. its already done with mail order items and physical purchases off the internet if you're in the same state its being bought from, so its about time taxes got modern and encompassed digital items too.

i think the state tax is on all digital items because its not shipped or stored anywhere specific. you could be downloading the song from a server in california or india, there's no clear way to put a physical address on a piece of digital media, so the tax is applied to all of them. anyways 5% tax on a 99 cent song isn't going to drain you much more than itunes and amazon mp3 already is. i found myself looking through songs out of boredom, ended up spending $35.

so yeah, tax on digital downloads aren't too big of a deal, and i dont think it'll effect actual physical items purchased online since they obviously have to be shipped from a specific state and thus you wont get taxed unless you're in the same state.

[AltruisticCrono]

Since WI isn't the first state to do this, I hope they'd have enough sense to follow what the other states have implemented to track this new law.

A little tax won't kill the market.. but stay away from more tempting/successful sources of taxation.