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Posted: 4/15/2006 6:23:18 AM EST

Democrats more likely to favor iTunes taxes

Declan McCullagh, for News.com
Published: April 13, 2006

Democratic politicians in state capitols are more likely than Republicans to permit what critics are calling the "iTunes tax"--taxes on digital purchases of songs and movies.

A CNET News.com analysis of the states that tax digital downloads, such as those from the iTunes Music Store, shows that nine protax states have legislatures controlled by Democrats. By contrast, five of the protax states have Republican-controlled legislatures.

Overall, state legislatures in the United States are evenly divided between the two major parties: 21 including the District of Columbia are Democratic; 21 are Republican; eight are split; and one (Nebraska) is nonpartisan, according to the National Conference of State Legislatures.

The iTunes partisan divide

Nine states that tax digital-media downloads have legislatures controlled by Democrats. Five have Republican-controlled legislatures.

Alabama: D
Arizona: R
Colorado: D
Hawaii: D
Idaho: R
Indiana: R
Kentucky: Split
Louisiana: D
Maine: D
New Mexico: D
South Dakota: R
Texas: R
Utah: R
Washington: D
West Virginia: D
Washington, D.C.: D

Source: CNET News.com research, National Conference of State Legislatures

A News.com special report Thursday says most states have overlooked taxing digital downloads--iTunes purchases, e-books and movies--so far, but as online media purchases are booming, politicians and tax collectors are eyeing the area as an untapped source of new revenue.

New Jersey Gov. Jon Corzine, a Democrat, proposed in his budget (click here for PDF) that "downloaded music and videos" be taxed starting Oct. 1. The state tax agency expects legislation to be introduced in June.

Taxpayer advocates have criticized the trend toward increased taxation of downloaded media files. (This is a separate debate from the one dealing with taxation on items purchased via the Internet but delivered in physical form.)

"I'm sure that state and local officials, given enough time, will come up with a sky-is-falling study saying that if they're not allowed to tax this, they'll lose a trillion dollars a year," said Pete Sepp, vice president for communications at the National Taxpayers Union, a nonpartisan group that advocates lower taxes.

It's not always clear who authorized iTunes taxes. In Washington state, for instance, the Democratic-controlled executive branch reinterpreted the definition of "computer software" in the tax code to cover music downloads. But taxpayer advocates say that the legislature ultimately sets tax policy and is responsible for overriding any bureaucratic legerdemain.

NTU's Sepp also argues that digital downloads are already being taxed. He says that anyone connecting to the Internet through dial-up, DSL or a cable modem is already paying telecommunications taxes; anyone with an iPod paid sales taxes on it; companies offering downloads are paying property taxes; their stockholders are paying dividend or capital gain taxes; their employees are paying income taxes.

"Obviously we need to start considering limits on this sort of taxation," Sepp said.
Link Posted: 4/15/2006 7:14:27 AM EST
Link Posted: 4/15/2006 7:21:56 AM EST
Link Posted: 4/15/2006 7:24:07 AM EST
[Last Edit: 4/15/2006 7:28:11 AM EST by nightstalker]
It would make more sense if it were yours to re-sell, like CDs.

I've purchased one song from iTunes. A friend wanted it for music at her wedding.

When they start selling 5.1 or 7.1 SACD quality downloads I might be interested.
Link Posted: 4/15/2006 7:24:12 AM EST

Originally Posted By Paul:
The story I read had a map color coding the states that tax non-tangable assets. I was amazed to see Texas taxing non-tangable assets.

Someone has to pay for all the illegals in TX schools.
Link Posted: 4/15/2006 7:39:41 AM EST
Democrats favoring new taxes? Will wonders never cease.
Link Posted: 4/15/2006 7:44:03 AM EST
Its a good thing that I don't "purchase" songs or CD's I get off of the internet.
Link Posted: 4/15/2006 7:44:35 AM EST
Newsflash: Democrates are likely to favor ANY taxes. Its called "redistribution of income."
Link Posted: 4/15/2006 8:15:07 AM EST
wait a minute guys! i've got it! let tax air!we all need it to breathe, so lets tax the hell out of it!
Link Posted: 4/15/2006 9:26:32 AM EST
Democrats NEVER saw a source of potential revenue they didn't like. Face it...how can they accomplish their social engineering unless they control the money.

Shit...I'm surprised they haven't tried to tax sex! Imagine the revenue that could generate?
Link Posted: 4/15/2006 9:27:55 AM EST

Originally Posted By LWilde:
Democrats NEVER saw a source of potential revenue they didn't like. Face it...how can they accomplish their social engineering unless they control the money.

Shit...I'm surprised they haven't tried to tax sex! Imagine the revenue that could generate?

No, they just Ban sex. Didn't you watch Penn & Tellers Bullshit this week?
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