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States Seeking Levies on Digital Downloads
evdubs writes "15 states and the District of Columbia currently tax online media, with others eager to begin their own taxes. The RIAA estimates that domestic sales totaled $503 million last year, but that figure doesn't include movies, e-books, online video games and other forms of digital media. Perhaps the most interesting point in this article is the way states, looking to start taxing online media, are trying to use the interpretation of previous law and apply it to digital media. In Washington, politicians are using their definition of software (already taxable), 'a set of coded instructions designed to cause a computer...to perform a task,' to justify taxation of online media because 'they cause some action by a piece of hardware to play them.'"
It makes me wonder how they could possible determine who owes what. If someone from the UK purchases digital goods from me in Michigan - how would they know the difference? It will require that businesses volunteer the info - not likely
Next step... Tax my /. posts
...
require that businesses volunteer the info
JUST LIKE SALES TAX on in store sales..
do you think any seller of legal electronic media (movies, music, photographs) is not going to be a large enough company to plan on compliance with their local laws?
every day http://en.wikipedia.org/wiki/Special:Random
As the government/corporations keep going down this road, we will all just have to go back something like the old BBS days where everything is private and you have to know someone to get in the door. Which to be honest, sounds good to me.
.. so this cd of linux is worth an estimated 10000, so you owe us 100 bucks or we put you in jail )
This is also getting out of hand. Next they will assign an arbritary value to OSS software ( well, lets see. windows is xxx and office is xxx and and and
---- Booth was a patriot ----
I'm not entirely opposed to the idea here, but exactly what value are the taxing entities (states, districts, etc.) providing in exchange for the taxes collected? I could see the Feds providing structure and market enforcement via the FCC and FTC, which could possibly justify a federal levy, but where does an individual state get involved? That part I'm having trouble seeing.
Of course, there's the other perspective which has state governments looking for any means to plug massive budget holes, so to that extent they're probably just following the old John Dillinger line as to why he robbed banks - because that's where the money was.
Stop by my site where I write about ERP systems & more
thats why I've already started giving away some of my software for free with support. By signing a support agreement, my tools can be licensed for use for free by your company... I'm not selling them, you can't tax them.
meh
3. Profit!
He tried to kill me with a forklift!
In Kentucky, I pay $1.07 for a song from iTunes. For some reason, my state feels the need to collect on content that didn't originate in the state, isn't served by an employee that works in the state, isn't stored on servers inside the state, and isn't necessarily even bought inside the state (a purchase made on a laptop while on vacation, for example).
For me and my state, adding that $.08 to cigarette tax would be much more productive. I wish they would do that instead.
In Washington, politicians are using their definition of software (already taxable), 'a set of coded instructions designed to cause a computer...to perform a task,' to justify taxation of online media because 'they cause some action by a piece of hardware to play them
...except that the media file itself cannot cause the hardware to play it. Software must be employed to decode the file. Double-clicking on the file's icon requires more software, the OS, to load the software required to decode the file.
This'll take about five minutes to be thrown out. *yawn*
The only surefire protection against Microsoft infections is abstinence. - The Onion
...a DVD, a CD, and other types of media that are just media are also "software." In a CD's case for example, the CD causes a CD player program to react and play a tune, so is the CD now software? These idiots don't even understand the distinction between "data" and software. Let me give you a hint morons: software is executable, data isn't, the two are not the same at all. Data, in and of itself, causes nothing to happen. You could double-click on an MP3 all day, if you have no player installed it doesn't work. We seriously need to start getting people into office that understand computers at least to this basic degree.
Judges and senates have been bought for gold; Esteem and love were never to be sold.
With that dubious justification, at least The Man finally figured out a way to take nail the virus writers and spammers. Get the Treasury Department to bust them for tax evasion. Capone 'em!
Apple has always taxed online purchases they are incorparated in every state or something alongs those lines (* i honestly do not what it is *) so they charge taxes anyways on online purchases including iTunes no matter where your billing/shipping addresses are.
So the fact that I live in nebraska and my state does not explictly tax online downloads; i still pay someone taxes on iTunes songs and purchases from the main apple store.
So this post seems to confuse and spread F.U.D, if anything could be surmised from any of this is that governments would like to tax digital media more.
No taxes to pay on free stuff.
This hardly affects me as a consumer (open source, and my pay-for entertainment ALWAYS comes on a disc) but being in the software industry I'd like to know - didn't the federal government have a ban (at least temporary, for the next several years) on internet sales taxes?
How would it get around this?
This is expected, along with other twisted plot points in the struggle for the world to become completely flat with regard to regulation, business, and other things of huge impact to joe public.
... well, up till now. As they lose power and control, they will do many twisted things to try to retain it.
Some of the processes to watch are: Immigration, offshoring, outsourcing, foodstuffs regulation, computer and internet regulation and taxation.
The world is very busy at becoming flat in many regards. Something tells me the French will always be a sore thumb, but everyone else is interested in commerce and becoming either wealthy consumers or those that supply them. Once the regulatory grip slips loose a bit, watch how farmers start selling their products both without the protection of the government, and without the stranglehold on how they can sell their products. Food has been used as a political tool for too long, as technology has been. The old guard are losing control of all the things that kept them in power for
As for taxation, without funds from taxation, governments become rather helpless groups of mislead individuals. This is just one *SMALL* sign that its time to revamp the tax schemes here in the US. The old ways are falling behind so quickly that it will be difficult to keep up... we need someone to start a wiki or something... A place where government types can go to learn about the brave new world they are facing and how they can effect a stable government within it.
Support NYCountryLawyer RIAA vs People
We had to see this coming. Our elected officials will endeavor to fuck us as hard and fast as they can.
yup and YOUR FAULT for getting them elected. So many utterly corrupt and self serving people get elected to office and all the americans that complain about it do nothing. Have you went out of your way to ind a candidate at an electing and supported them over the corrupt ones and informed others how self serving the others are? do you write these representatives tellingg them how you will go out of your way to let everyone know how they are trying to steal from them?
no?
your fault then. you only escape blame when you can tell me that you actively oppose these nimrods.
So are they trying to tax items you download if the company has a physical presence in the state or no matter what? The old brick and mortar way of solving taxation, which is how catalog orders were handle since catalogs came about, is something states have been trying to squash for years. Seriously, if they are following the old model, I really have no problem with it. Many of us are already dodging sales tax on the purchases of items from Amazon and the like.
Now many states have tried to get around the old method of taxing by creating "Use Tax." I saw this nifty little item when I filed my taxes this year. They basically want to charge you sales tax on items you purchased online and, in some cases, other states. The latter one bothers me because it is absurd to be taxed twice simple because you either moved or purchased items while travelling on vacation. The initial one is almost as absurd, since it relies heavily on them getting the truth out of you. If you do not claim to purchase anything online then it is sort of hard for them to say you did, short of tracking all your CC purchases.
The states have complained for ages it seems about the loss of money from online purchases. I personally think that while states might lose money, it actually helps overall economy. If people have to pay a few dollars less and not pay tax on an item (especially higher priced ones), they are more likely to purchase the item. Now if this item requires disposable or extra items (i.e. batteries, DVDs, etc.) you are more likely to get people purchasing those locally as well. In the end, the states still get money, they may just miss out on a small portion of it every now and then. Instead of sales taxing us all to death, raise liquor, tobacco, or hotel taxes to cover expenses. I enjoy the hotel taxes because I do not have to pay my local governments, the tourists do.
"Some days you just can't get rid of a bomb."
I cannot believe they pulled this! Until the federal government changes the rules, though, the political tussle over taxing digital downloads will continue in state capitols. Last year, Democratic Wisconsin Gov. Jim Doyle proposed a tax on iTunes purchases, with his administration calling it an "issue of tax equity." Republicans pledged to defeat it, and they ultimately prevailed.
Oh wait... They're on our side. All of you DailyKos readers just look away. And just forget about the 800lb gorilla.
This guy is way out there
Digital media does NOT cause any action to occur.
None of the currently used media file types have any *code* in them that causes actions to occur.
The computers that have media players on them, have settings defined that tell the computer what to do when that media type is selected.
Someone should explain the difference between media and the device.
I can strip the entries out of the registry, and drop media files and even double click them all day long and *NOTHING* will happen, except that I'll either get a sore finger, or break my mouse.
Who is general failure, and why is he reading my hard drive?
unclench them
Much better than taxing the gas guzzling SUVs that exploit loopholes in the law or taxing cigarettes. Yup, very logical.
This guy is way out there
How will state download taxes play into the piracy issue? Is the RIAA maybe looking for allies (piracy = tax evasion)? Are they perhaps whispering in to state legislator ears ("just look at the tax income, if you help us (RIAA)" )? Conspiracy theories anyone?
Maybe this is a good thing. Taxation for digital sales can be easily automated. It allows my chronically underfunded state government to pick up revenue it would otherwise miss without a high enforcement expense. Right now, we have to depend on Washington D.C. to fund large portions of our roads, schools, and other infrastructure. Maybe this would help us pull our own weight.
Trying to use sarcasm in text-based forums does not work.
So now what... music patents?
How are they going to tax allofmp3? I bet those clever russians have a loophole for just such an occassion.
It's called sales tax. States should do a better job of enforcing their existing taxes before trying to collect new ones.
That seems to be what the State Governments are saying. A lot of people sell stuff at garage sales and dont report the sales as taxes.
Reminds me when I was 11, my friend was mowing a few lawns that summer for money. He didnt make much maybe $60 bucks. But the IRS guy that came by their house was telling him and his parents he needed to file taxes the next year. I'm sure the IRS guy was being technically legal, but it seemed more anal to me.
From what I understand about online music, we cannot copy it because we are merely "licensing" the right to play it, not own it. This though is in contrast with the statement from Tennessee which says ""Music is included because music downloads fit the definition of personal property,"
Does this mean then that we now own music we download, and can freely do with it what we wish!?
If so, tax away.
Sig- http://www.dreamhost.com/rewards.cgi?ayefly
Piracy on the rise in 15 states and the District of Columbia
Peace, Love, Unity, Respect
Yup I sure do. Being a regis-turd Libertarian, I write, I yell, and rant. As my father taught me. I am only one, yet still I am one; and I will not fail to do that one thing that I can do. The problem is the people who don't care about what is going on in elections outnumber those who do know the difference between candidate A and candidate B. When you can win votes by saying the other side is for "them gays gittin' married", that says it all. We live in scary times.
A computer once beat me at chess, but it was no match for me at kick boxing. Emo Philips
Well. The iTune, Napster and eMusic will just have to move to Navajo country to circumvent the law along with the casino and cheap cigarettes!
These idiots are intentionally merging the definitions of "data" and "program".
Last I checked, you can't run an mp3 file anymore than you can run an avi file.
You need software to interpret the data. The data is what people are buying.
Let's face it: these greedy little bastards want a cut of the action EVERY TIME money changes hands. They want a cut when you buy something from a store, from an individual (eBay, Rummage Sales, Classified Ads, etc), whatever. Everytime we find a way around the law, they will find a way to "reinterpret" the law to include that which was missed in the previous interpretation.
Ron Gage - Westland, MI
If the levy breaks, will there be a torrent?
Unknown host pong.
What a load of crap. I see two issues here which don't appear to be addressed by the authorities levying the taxes.
1) No justification for the taxation is provided. There should be some underlying benefit to "We the people" for any taxation. i.e. I pay a hefty tax every month on my communication bill for various services provided to society, two of which are funding for communication access for the disabled and funding for communication access to rural areas. Levying a tax on downloaded media just because they can is not justification and depending on what they are considering a download it could be construed as double taxation since I already pay several taxes on the communication itself.
2) One of the concepts which jump started the United States of America was the concept of "No taxation without representation". Now I realize we have representatives in government who were voted into their positions by the people, however, if these representatives are not representing the interests of the people who voted them in and instead are representing the interests of the government or corporations then they are no longer representatives of the people. Before the American Revolutionary War the British argued that Americans did have "virtual" representation in parliament and therefore there was no need for American representatives to participate in the British government. We all know how that one turned out and virtual representation is no excuse today either.
I actually don't mind paying taxes, I think I enjoy many benefits from taxation here in the States, but I'd like to have some justification for new taxes beyond creative interpretation of existing laws.
burnin
Why can't we have nice things?
Without reading the comments yet, let me just say, here's another reason to pirate stuff! What's with The Man, always trying to keep us down?!
Won't this only work if people start paying to download
music?
don't worry, those driving SUVs are paying for them. The burn more gas and hence pay more in taxes to travel the same distance as others. They are usually more expensive to repair as well.
I look at it this way, if someone wants to buy the big SUV, pay the premium for doing so, and then to top it off pay for all that extra gas I say LET THEM!.
Besides there are quite a few people who can justify owning one for hauling the family. Singling out SUVs has gotten so low-brow it makes me wonder why people want to follow such a stupid path.
As for cigarettes, states are looking elsewhere because all their taxes are having the effect they claimed they wanted : reduced smoking. Problem was when the smokers quit it meant someone left the voluntary tax roles. Lottery tickets certainly don't make up all that money so its got to come from elsewhere.
I look at the bright side, my state has a near 1 billion dollar surplus because it doesn't specialize in income redistribution which what most states running a deficit are doing. They have promised so much money and service to people they have no choice but to scramble for every last penny.
Instead of asking why they aren't taxing some people more you should really be asking why are they taxing it in the first place. Too many spend more time wanting to inflict financial burdens on others than the more logical idea of reducing them on all.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
That's unfortunately a very naive view of the situation. Sales taxes can apply at local levels in addition to state levels. Recall this story from a few months ago. This stuff is not trivial, and you have to pay ongoing big bucks just to stay current (much like the mandatory Quickbooks subscription fees). No, I'm afraid it's far more complex than you're suggesting.
At the very worst, since they are about 25% of the RIAA price, you would pay 25% of the taxes.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
This is just weird. Why would online music be any different from music bought on a cd?
In Denmark you pay 25% tax (it's called MOMS) whenever you buy something as a consumer, whether it is goods or services (say a visit by a plumber). I believe many other European contries have something similar.
Isn't it the boost in government spending (read "waste") that is creating the budget shortfalls? Just like raising gas taxes, property taxes, sales taxes, cigarette taxes, liquor taxes -- it all happens because once lawmakers get their hands on those billions, they can't help but spend it recklessly, to the point of drilling an enourmous hole in the budget that John and Joan Taxpayer have to fill. This is just local government trying to find a way to cover its own ass by papering over the hole, when we all know any revenue generated by these taxes is going to simply be frittered away.
Maybe these state governments should try balancing their budgets first before bludgeoning their citizens over the head with more taxes.
GetOuttaMySpace - The Anti-Social Network
How do they plan on taxing FOSS downloads? Enter an "in kind" figure to it? Tax it like a similar for-lease-to-use piece of commercial software? How about if you go read a news page, tax it like a dead trees newspaper?
Unless he was mowing the IRS guy's lawn, how in the world was he discovered? I make hundreds of dollars each summer mowing lawns.
I live in Japan. There is a 5% tax built into every price, and when I buy something from the Apple store, or a convenience store down the block, it's taxed. Since I don't see the tax, I don't think about it, and this is the Way It Should Be.
The ONLY way to solve this mess is if Congress makes a national sales tax, overriding state sales taxes. Set it at 8% and guarantee that oly 1-2% will be taken by the federal government, with the rest going right back where it should, to the communities/cities/states.
Search your feelings, you know it to be true!
You've got a friend in Japan: http://www.jlist.com
Let's face it, it isn't college students and minimum wagers that are paying for the downloading of music. A person that buys their music from iTunes has the money to do so. Most of the outrage that comes towards taxing it comes from those who aren't paying for their music collection. These taxes will all be added because the majority of people have no idea what bills are being passed.
Slightly OT: I don't understand why more Americans don't go to the local library. Most of the music on my iPod was taken directly from the CD. I control the quality. The libraries have a very good selection of music, including huge box sets that cost over a hundred dollars from stores. If the library in your neighborhood doesn't have a cd you are looking for, they will check the county branches, and then even at the state level, and then send an email when the item arrives. I don't mind waiting 1 to 2 weeks to hold a cd in my hand and generate my own copy. Sitting at the computer searching mp3 sites, or bit torrent for an obscure song is a waste of time when the libraries databases are avaiable in the same browser.
It's already scary when your tactic isn't telling what YOU could do but when you simply rely on claiming what OTHERS would do. It's like saying "we're the lesser evil".
Do I want the lesser evil in charge? To be blunt and honest, I'm not going for the lesser evil, I'm going for the best option. If there is no good option, get rid of all of them and start over.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
All that has to be done is change the tax codes to relfect 'value' not 'cost'.
Actually they sort of do that now, if you get caught claiming you bought a car for 5 bucks thats is 'valued' at 50000, they can get you for fraud and tax evasion. Or at the least it rasies flags and you get your property searched and a major audit of your life..
---- Booth was a patriot ----
15 states and the District of Columbia currently tax online media...
I'm curious to know which they are. I was recently forced out of my house due to a sinkhole. I'd consider relocating based on digital download taxes.
No, not really. But I'd like to know.
The only thing necessary for the triumph of evil is for good men to do nothing.
"music downloads fit the definition of personal property", according to a Kentucky government spokesperson.
Does that mean that when you pay for a download and it disappears after a month or you can't move it to a different device, that the Kentucky government will prosecute the company responsible for violating your property rights?
Conversely, if the software makers can argue "this-software-is-licensed-not-sold", how could there be a sales tax?
They need to leave this stuff alone, and be glad people use the internet to buy hard items which they do get some revenue off of.
if you make it too costly to do business, then the 'retail internet' goes away. Espcially in this economy, which will just get worse due to greedy stunts like this.
---- Booth was a patriot ----
Back when I was in college aeons ago obtaining my BSCompSci degree, here's the official definitions we learned:
Hardware - any collection of electronic and/or mechanical computer components upon which software could stored and run to accomplish something useful.
Software - any collection of instructions and data (yes, SW included raw data itself too) employed by computer hardware to do something useful.
There did not back then at my college, exist the three separate distinctions of (1)hardware, (2)software and (3)data.
There were only two: HW and SW for official definition purposes and anyone who disagreed with the CS professors and tried to assert that data deserved its own category separate from software was chastised and ridiculed, as it was asserted that program source code and compiled code was just simply another form of information, therefore it was all data or "software".
By continuation... The more gas you buy the more oil comes from Saudi Arabia, the more money goes to the terrorist (yes they are still funding them), the more money goes to buy weapons, the more money goes to Boeing, Haliburton and all, this way the money returns to the American leaders and power base.
Remember thirty years ago no oil was imported from the middle east. If a certain president had not reduced CAFE ratings and cut off alternative energy incentives that would have improved our efficencies and built new technologies who knows what tall buildings might still be standing?
Maybe someone more up to date on this could comment, but as I recall, MPEG4 was going to incorporate Java; though I think they settled on something else. The idea behind the standard is more of a programming language and library infrustructure for decoding and playing back media. The decoder codec effectively comes with the media stream.
Although we intuitively think of documents as "data", many of them are effectively programs (such as any MS Office document). It really isn't a stretch to say that media files are actually programs being licened for use. They have all the same legal (copyright and patent law - codecs commonly have patents) and functional characteristics (incorporates turing machine complete set of instructions). I've also worked on technologies that generated code based on the "data" being used; the two aren't always seperable.
If the government spent the money we already give them a little more wisely.
“Common sense is not so common.” — Voltaire
There used to not be a distinction.
The term "software" used to include both code and data, as both were simply forms of information which computer hardware used to perform some useful task. Even the ACM themselves used to only make the two distincions of hardware and software. The concept of three separate distinctions (hw,sw and data) is a fairly recent change (1990's) adopted by academia, and most states' taxing authorities are run by folks who got their college degrees back in the 1970's and 1980's when they learned the official definition of "software" included both code and data.
The first because the Senate no longer represents the will of the State's legislature and second because the Federal Government encroaches on the power of the states too much.
How would this help out with concern to the current story?
Simple, many states are stuck with underfunded or unfunded Federal mandates. So the states look in ever nook an cranny for money. Yeah we would still have states taxing everything but the air we breathe but it would be far easier to avoid those states instead of being stuck where all of them are surragate collectors of taxes to fund Federal mandates that the Federal government had no real basis for doing.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
cannot afford to have a vehicle for every occasion. Too many people complaining about solo SUV drivers seem to ignore that issue and gloss over it when they see the same behaviour in sedans. Why not ask yourself why you have a car with more than 2 seats when you drive to work by yourself? Most won't ask themselves that question because it far far easier to pin blame on another.
Many of the women here at work drive SUVs by themselves to work. Its not because they like SUVs, though some do, its because family finances dictate someone has to have the family vehicle and that usually it put upon the wife. I see quite a few married guys here with econo-boxes or little pickups - whose wives have the van or suv.
Look at all sides of the story before assigning guilt, there certainly is enough guilt to go around.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
For $60? One would think that earnings that low wouldn't necessitate an IRS filing. However, he may have qualified for the EITC!
How the hell did we get to this point?
Because a lot of people voted for politicians who promised them a lot of "free" stuff, without thinking too hard about who was going to pay for it?
There was a time when I would have said those politicians were called Democrats, but sadly now it's pretty much everybody (except for some quasi-Libertarians).
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Assuming you're not trolling... the IRS agent was wrong.
Minors are not required to report income nor file taxes if they earned under $600 for the year. Since I assume he was a minor (what with you being 11) and earned under $600 (since you said $60), the IRS agent was mistaken - or being an @$$.
I am not a CPA or anything, this is not legal or tax advice.
That's actually kind of interesting. I feel like there probably is a law against it, though, or everybody and their cousin would be getting payouts from their bookie in Gold Eagles.
There are also other coins you could do it with, I think; IIRC there are some silver pieces which are worth way more than their face value in terms of precious metals.
Actually, couldn't you just do this with any fairly valuable piece of rare US currency? Say a 1928 $2 bill or something; it's got to be worth more than two dollars, but legally it ought to be negotiable as currency. That "Legal for all debts, public and private" line doesn't have an expiration date on it.
It seems too obvious a way to avoid taxes though. If there were really a loophole that good, people would be using it already.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Great! They're going to tax viruses! Every time your computer catches a virus or a keylogger that compromises your credit card information, steals your PayPal password, etc., you will now have to pay state tax on any money that is stolen.
What? You don't think so? If they can write an arbitrary definition of 'software', they can write an arbitrary definition of 'purchase'.
Find environmentally and socially responsible products on http://buy-right.net
I'm not at all opposed to a smaller more efficient government but the way to achieve this is not to try to make taxes more complicated by insisting on bizarre historical precedents or even to try to reduce taxes at all. Instead, the way to get the government to be smaller and more efficient is to advocate that directly. Reducing taxes does not force the government to cut spending, it merely causes the government to incur massive debts to be paid off by future generations.
Furthermore, the way to get the government to be smaller and more efficient is not to advocate more bureaucracy to try to impose complicated rules about who gets government assistance and who doesn't, the way to make government smaller and more efficient is to make the basic necessities of life available to everyone without any restrictions but to place upper limits on the amounts of assistance that any one person receives. Everyone should get all vitamin fortified rice and beans they care to eat for free from the government but no one should get free champaigne and caviar from the government. Everyone should get a basic level of health care free from the government but no one should get hundreds of thousands of dollars of free health care from the government.
For people who think small government is important, they need to first look at what the government spends on them. Too often there is some rich person who has either received millions from the government (health care, upper level military pension, etc.) or who is pushing for hundreds of billions to be spent on frivolous government expenditures that they want but then this rich person is all freaked out about a few hundred dollars being spent on some poor person.
If you want to argue for smaller government then first advocate cutting government expenditures on those things that are important to you before you advocate cutting government expenditures on things that are important to other people. Otherwise you are just being selfish and dishonest.
http://www.nj.com/business/ledger/index.ssf?/base/ business-3/1144385793100320.xml&coll=1
The names and purchase information of smokers who bought cigarettes online are being relinquished by the Web-based purveyors, after prodding by the state Di vision of Taxation.
The Taxation Division cited a 1949 federal law, the Jenkins Act, to obtain lists of New Jersey buy ers. The law requires remote sellers of cigarettes to provide names of buyers to state tax authorities, said Tom Vincz, a spokesman for the state Treasury Department.
In the past year, several other states, including New York, Michigan, Minnesota, Nebraska, Ohio, Oregon, Pennsylvania and Oregon, also have used the Jenkins Act to crack down on residents who buy cigarettes over the Internet but don't pay state taxes.
New York City announced in March that through a settlement with eSmokes.com, the company is surrendering 12,500 names of customers from 2000 to 2003, when a New York state ban on Internet cigarette sales took effect. It was the largest list of names obtained by the city.
every day http://en.wikipedia.org/wiki/Special:Random
next thing you know, you'll have to pay tax on that /. subscription. Now that would be a news item.
But I'm already paying taxes every month on my ISP bill just to get unmetered internet service. If I pay tax on that plus also have to pay tax on the bytes that I receive, isn't that a form of double-taxation?
You know, you should really attribute that quote in your sig to a person, instead of a place. Unless Armonk, NY is particularly talkative.
"Winners compare their achievements with their goals, while losers compare their achievements with those of other people."
-Nido Qubein (reference)
Qubein is a motivational speaker, and I expect that if he actually did say that in Armonk, NY on August 8th, it was probably in a presentation to IBM (given that they're practically the only game in that town).
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Taxation for digital sales can be easily automated.
Uh huh. How?
I'm interested in hearing how you plan on knowing when anyone in your state connects to a webserver in some other part of the country or world, via an encrypted connection, and causes some money to be transferred from a bank in some other state to a bank in some other completely unrelated state, and then downloads some data.
Also, you have to be able to force this system onto parties who are both going to be basically hostile to it, since people aren't going to want to pay the tax and are going to avoid if possible, and businesses aren't going to want to pay it because it's going to be a PITA for them and make them less competitive versus merchants (for example, international ones, quasi-legal or not) who don't pay.
This whole thing would be an enforcement nightmare. It's totally unenforceable; the only ways I can think of doing it would rely either on the cooperation of the merchants (not likely, what impetus do they have to comply? It's not like you can magically keep them from selling to residents of your state somehow) or the buyer (equally not likely, and anything that requires their cooperation is the same as the status quo, which is asking people to report use tax on their returns every year).
I can think of only one way to implement such a scheme: pass some sort of Federal law requiring all of the credit card banks and companies to automatically "BCC" your State's Department of Internal Revenue every time you completed a transaction, and then having them automatically charge you Sales Tax on all of your electronic purchases, unless you could prove that sales tax was already included. I don't know about anyone else, but just the idea of that creeps the living hell out of me; people whine about the NSA snooping on their email, which at least you can encrypt -- this would be mandated disclosure.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
For those that don't know, IPac is a new political action committee whose primary focus is to remove people from office who make bad policy decisions related to technology. Their website is at http://www.ipaction.org/ . This is a great way for the "little guy" to get involved and actually have a voice in a process that has thus far, been fairly non-representational as far as the average citizen is concerned.
In Washington, politicians are using their definition of software (already taxable), 'a set of coded instructions designed to cause a computer...to perform a task,' to justify taxation of online media
What exact justification do politicians need to levy a tax other than:
1. We need the money for something.
Don't misunderstand me, I'm no anti-taxation true believer, but come on. Who needs to justify it?
Why can't we do a vote of no confidence like Canada did just a short while back? That way we can get rid of every Washington politician and hopefully get an average Joe in there; the way the country was first run.
...without a new Constitutional Amendment which would then permit them to do so. Currently the US Constitution specifically prohibits any national sales tax. It took an Amendment (16th) to create the national income tax, and it'll take another one to make a national sales tax legal, or else we would've had one a long time ago.
At base level, a CPU is nothing more than software in physical form (conversely, software is nothing more than hardware in virtual form). It does not take many instructions to create a UTM: a simple, 6 instruction 2d cellular automata can do it, just ask Wolfram. Furthermore, any attempts to increase the complexity of such a system (by adding more dimensions, or a more complex instruction set), ultimately reduces down to the simpler system mathematically. It may take longer for this simpler system to perform the same tasks as the more complex solution, but perform them equally it can and does, otherwise it is not Turing Complete.
Lastly, the substrate upon which this system runs is unimportant - whether it is silicon etched with chemical and light running on electricity, squishy bits of DNA, RNA (messenger and transfer), and ribosomes, or atoms "randomly" bouncing around in the universe - it is all the same.
I bet the politicians are just wetting themselves over the idea that they can tax every quantum particle in the universe as "digital data". Most people, especially politicians, have ABSOLUTELY NO IDEA just what the whole ball of wax that is computer science, information theory, network theory, chaos mathematics, emergence, etc - actually is. If they honestly, rationally, logically did, for most of them it would shake them to their very core, because these are the very tools by which we will "find God" (and ultimately realize the ephemeral, illogic nature of such a concept, as if you need those tools to see that).
Reason is the Path to God - Anon
Nobody can invent anything that U.S. politicians can't find a way to tax. There has never been a nickle that they couldn't find a way to waste.
The most insightful comment ever made in DC was: "If you send it they WILL spend it!" - G.W. Bush in the spring of 2001 rallying support for tax cuts.
Politics is so aptly named, from the latin - poli = many, tics = bloodsucking creatures
Professional Politicians are not the solution, they ARE the problem.
Don't people on Slashdot use bittorrent anymore ?
How are they gonna tax that ?
Media doesnt tell the comnputer what to do. Player software does....
There are a number of threads here with points worth responding to. I'm too lazy to put them all in the respective threads, so I put them here in one place. Here is the skinny on Sales and Use tax issues, at least in PA. It applies to taxability of digital downloads specifically but touches on other issues as well.
/rev-227.pdf), but I haveto pay the additional 1% to PA on a use tax return.
1. Sales tax:
To be required to collect sales tax from customers, businesses must have a nexus with the state. Physical presence is sufficient, as Lynn Swann found out from selling his footballs. Sales tax is collected by businesses, not consumers. Physical things (tangible personal property) must be sold to the end consumer in order for the sales tax to be due in PA. Services (some) also incur sales tax. For property sales, however, you needed tangible personal property, not intangible ones.
2. Use tax:
This is required to be paid by customers (purchasers of tangible personal property). If I buy a sofa in MD (5% sales tax) and bring it to PA (6% sales tax on a taxable item of personal property), I am required to pay sales tax. I can get credit for sales tax paid to MD (see: http://www.revenue.state.pa.us/revenue/lib/revenue
From a practical standpoint, use tax is paid in two scenarios, primarily. First is by businesses with multijurisdictional operations that transfer property between states. Second is by consumers who buy cars elsewhere and register them in PA.
3. Sales and use tax issues - tangible personal property:
One of my partners does SALT work (State and Local Taxation) and he specializes in going to businesses to do reverse audits to reduce taxes paid going forward by changing business practices and in appling for refunds for improperly paid sales and use tax.
One big issue with sales and use tax is whether something qualifies as tangible personal property. Software has been a big issue in Pennsylvania. The Graham Packaging case decided that issue:
http://www.revenue.state.pa.us/revenue/cwp/view.as p?a=318&q=252626
http://www.courts.state.pa.us/OpPosting/CWealth/ou t/652FR02_9-15-05.pdf
The relevant stipulated facts of the case are as follows:
In connection with the appeal to this court, the parties entered into a
stipulation of facts which states, among other things, that: (1) users of software programs do not own the software program; rather, users purchase the right to use the program in accordance with the licensing agreement and copyright law; (2) computer disks are often provided free of charge to multiple user license holders; (3) computer disks do not give users rights of ownership to the software; (4) computer disks remain the property of the licensor of the software program; (5) the physical delivery of the computer software program can be accomplished without the transfer of the computer disk and the computer disk is not necessary for the use of the program; (6) the physical quality of the computer disk does not affect the price of the computer software program; (7) Graham paid Dell for two-year license renewals of software licenses previously purchased by Graham; (8) the delivery of the computer software sold to Graham was originally accomplished by disk; (9) the license renewals at issue did not involve computer disks; and (10) the original computer disks were obsolete at the time of the license renewals. See Stipulation of
Facts (filed March 2, 2005).
Before Graham Packaging, there was a big difference whether software was downloaded or delivered via CD. To wit: say I want an AV program. If I want the most sales tax advantaged way of buying one, I purchase and download AVG Antivirus instead of buying a copy of the Syman
Lots of petrified grits
I need to ask the question, what is the justification for sales tax at all? Personally, I've never understood it. We get taxed on the money we make, and the real estate we own, plus the money we spend. Basically, if you make use of money (or credit), someone somewhere wants a piece of the pie, usually several someones (companies and governments). I understand the business argument, I'm using their server, insurance, bank, business, service. But I don't understand the government's theory. Seems like they're always looking for new revenue streams... as opposed to being TOLD they have to limit their spending to their income which is tied to .... a single simple revenue stream, like income. Not sales, not redistribution, etc. How is what I buy and where I buy it a case for taxation? Or, if it is, why is it not limited to ONLY sales tax, and leave my income alone? Earners get screwed on both sides of this issue, and without even getting a T-shirt.
In the age of electronic human communication, the basic human right to free speech is at risk.
These laws are so vague, as to classify an ASCII.TXT file 'computer code'.
After all, the text file 'programs' the computer to 'display a color pattern of pixels of different colors, forming letters and words, as to transmit speech, thoughts, and ideas.'
So, 'free speech' sites, as well as 'free e-text' sites would be forced to pay taxes on speech, if
they allowed the download of text files.
Even 'viewing' a web page is of course, downloading and running software.
It's a strange world we live in when the most successful criminals are the people running the government.
As April 15 approaches, ponder these words from Congressman Ron Paul (R-Texas), who has introduced legislation to abolish the income tax:
t m
"[C]ould America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of her history.
"Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker's paycheck.
"Even today, individual income taxes account for only approximately one-third of federal revenue. Eliminating one-third of the proposed 2007 budget would still leave federal spending at roughly $1.8 trillion - a sum greater than the budget just 6 years ago in 2000!
"Does anyone seriously believe we could not find ways to cut spending back to 2000 levels? Perhaps the idea of an America without an income tax is not so radical after all.
"It's something to think about this week as we approach April 15th."
Indeed!
Source: "Cough Up" by libertarian Congressman Paul:
http://www.house.gov/paul/tst/tst2006/tst041006.h
Libertas in infinitum
Police and fire can be paid for from property taxes (like in NH) because they add value to the property (in theory they should "pay their own way" by making the value of land go up by equal to or greater than the amount taxed away). Everyone pays for these services because they pay for a place to live which, in turn, goes to property taxes. These services are paid for while owners are out of juristiction, and rightly so, because they still give value to the owners by protecting property.
A laptop or item purchased outside of a juristiction cannot be simply stated to be the same species of thing. The laptop purchased outside of the juristiction in no way negatively impacted the juristiction by using any of its services. Unless you want to make an argument that they deprived the juristiction of future proceeds to be spent in that juristiction (which, because no one has a RIGHT to make money, is absurd), there is no reason to tax out of state purchases that do not use in state resources.
For taxing online content, one could argue that the data infrastructure is a state resource, but then why not tax every packet? Whis is an mp3 packet different than a wikipedia text packet? The point is, you can't, state service / infrastructure taxes get paid by ISPs and hence and end user via their internet bill. Data should not have tax tiers. Local stores get the benefits of police, etc, whereas data packets do not. The list goes on...