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Wisconsin Passes Digital Download Tax

Posted by Soulskill on from the harvesting-the-tubes dept.

McGruber writes with news that the State of Wisconsin has passed legislation to extend sales tax to digital downloads. The new law will go into effect on October 1st. Estimates suggest that the 5% tax on "downloads of music, games, books, ring tones and other video entertainment" will bring in $6.7 million annually. "[Wisconsin Governor Jim Doyle] has been fighting for the change for years. He and other state officials say it is a matter of fairness: Internet vendors shouldn't have a tax-exempt advantage over Wisconsin's brick-and-mortar retail stores." Similar legislation has been proposed in North Carolina, and we've previously discussed New York's foray into taxing sales made online in addition to downloaded purchases.

3 of 327 comments (clear)

  1. How do they enforce this? by SigNuZX728 · · Score: 5, Insightful

    I'm a little confused how they're going to enforce this law against companies that have no physical presence in the state? I did not see that addressed in the article.

    1. Re:How do they enforce this? by dedmorris · · Score: 5, Insightful

      The hot dog vendor only collects tax, and more importantly has the expense of filing in only one location. The small internet vendor could potentially be held liable to collect, file, and understand the tax laws of thousands of taxing jurisdictions. It's more than just the states. Could Madison attempt to enforce a download tax? What about the Dane County High School Football Stadium levy? Historically, out-of-state businesses have been protected in the US by nexus requirements. There are tens of thousands of taxing jurisdictions in the US.

    2. Re:How do they enforce this? by Anonymous Coward · · Score: 5, Insightful

      You do realize that having your withholding adjusted so that you owe instead of get a refund is a good thing right?