A MarketWatch article looks at the implications of Washington hearings on sales taxes for digital content.
The House Judicary Committee is debating compromises regarding the Marketplace Fairness Act, which passed in the Senate last May.
The system would allow states to collect sales tax on online purchases, to balance the playing field between online and brick-and-mortar stores.
The article, by Quentin Fottrell, says that this marks the end of tax-free digital content, with states wanting to collect tax from content like e-books and music.
He talks to Michael Mazerov, senior fellow at the Center on Budget and Policy Priorities, a non-partisan research institute in Washington, D.C.
Mazerov said states are losing over $500m every year on sales tax that should be collected by sellers of digital content.
“With that figure increasing every year, more states will be seeking this kind of revenue.
“Digital taxes will increase, as there’s no good justification for not taxing something just because it’s downloaded.”
The House Judiciary Committee hearings started on Wednesday, where they debated compromises that included two ideas to tax Internet sales based on the retailer’s home state, rather than the buyer’s.
During the hearings, Republican Jackie Speier, who is sponsoring a House version of the Marketplace Fairness Act, said: “When you look at it in the cold light of day, you cannot somehow suggest that it is fair that some retailers have to collect the sales tax and others do not.”
Read the article here.