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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.'"

11 of 249 comments (clear)

  1. Back to the old 'underground' by nurb432 · · Score: 4, Interesting

    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.

    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 .. so this cd of linux is worth an estimated 10000, so you owe us 100 bucks or we put you in jail )

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    ---- Booth was a patriot ----
  2. Bang for the buck? by TopShelf · · Score: 4, Insightful

    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
  3. Thats Why.. by bigattichouse · · Score: 5, Interesting

    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.

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    meh
  4. I don't get it by dsgitl · · Score: 5, Interesting

    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.

  5. By that rationale... by danpsmith · · Score: 4, Interesting

    ...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.

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    Judges and senates have been bought for gold; Esteem and love were never to be sold.
  6. This is expected... by zappepcs · · Score: 4, Interesting

    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.

    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 ... well, up till now. As they lose power and control, they will do many twisted things to try to retain it.

    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.

  7. Re:Makes pefect sense to me by drinkypoo · · Score: 4, Insightful

    A large percentage of the price of a pack of smokes is taxes already. It would be lovely to see the weight/class restrictions on SUVs and large trucks (like those F450 Duallys I keep seeing people driving around as their daily driver, they only want one car and they pull a fifth wheel) so that people had to have a commercial license to drive them. Hummer, Escalade, Excursion, etc would have this requirement, at least in most states. You wouldn't even be allowed to drive them on some residential streets, such as in San Francisco. One side benefit of this would be that people with commercial licenses get hit harder when they get a ticket...

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  8. yeah but... by k4_pacific · · Score: 5, Funny

    If the levy breaks, will there be a torrent?

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    Unknown host pong.
  9. No Taxation Without Representation by burnin1965 · · Score: 4, Insightful

    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

  10. "Personal property", eh? by Beryllium+Sphere(tm) · · Score: 5, Insightful

    "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?

  11. Re:How will they possibly track this? by hackstraw · · Score: 4, Insightful

    How the hell did we get to this point?

    There are no victims, only volunteers.

    "Back in the day", when Americans were not satisfied with the tax on goods, they threw the goods into the harbor. Reaction, more laws from the lawmakers. Next reaction, revolt.

    I was speaking with a guy in his 60s the other day, and he was quiet and just worked for a living. He bluntly said to me, "I don't understand why young people put up with the shit that the government is doing today."

    So, aside from PETA trying to keep poor frogs from being dissected* and the NRA wanting armor piercing bullets available for children, and the EFF, who stands up for their rights?

    I speak with lawmakers, individuals, post stuff like this on slashdot and have it moderated down.

    * I have a love/hate relationship with extremists. I guess they need to be extreme so that a decent middleground is reached, but frogs? I love frogs. I've had 1 tree frog as a pet, and 2 firebelly toads. Very interesting animals. But in the wild, frogs have about a 0.03% chance of becoming old enough to be dissected. Frogs/toads are pretty happy in captivity. A little water, a little girl frog for the boy frog to hug onto, some food, they sing at night. Cool stuff. But, we still need extremists, even though their rational is irrational, hopefully a decent middlegound can be reached.