Digital Goods and Services Tax Fairness Act
S. 765 and H.R. 1725
-
The digital economy is booming.
-
The current laws governing the digital economy are based on bricks and mortar.
-
Today, up to three states can seek to collect taxes from a consumer on a digital good.
-
That’s not right and needs to be fixed now.
-
The Digital Good and Services Tax Fairness Act sets the framework allowing the states where the consumer lives to, if they so choose, tax the sale of a digital good.
Background
-
Digital goods and services can include, e-books, movies, music and much more.
-
When a consumer buys a digital good today, three states may claim the right to tax the consumer:
-
The state where the consumer physically presses the purchase button;
-
The location of the server that provides the sale of the good or service; and
-
The state the consumer resides.
-
The industry is projected to generate $188.9 billion in revenue through mobile apps by 2020 and to protect consumers, the notion that three states are able to tax the consumer on one purchase must be addressed.
-
The legislation clearly identifies which state has the right to decide to tax or not tax digital commerce.