Eliminate Multiple and Duplicative Taxes
When laws that today govern our digital economy were created, things like cars and TVs were not around. The world has changed since our current set of laws governing who can tax your purchase of a digital good were created.
Think of it this way. You used to go to a store to buy a record. You were taxed at the point of sale, or not, depending on where you bought the vinyl record. Today, you can buy music on the fly, or anywhere. And here is the problem:
Which state has the right to decide to collect a tax for your purchase of that song? State A – oops, I hit the button in Bristol, VA, but a foot over, and I was in Bristol, TN. State B – the server farm that translated my purchase was in Texas, no, maybe Idaho, depending on a range of factors in the internet world. State C – where you live and have a say in state tax policy decisions.
Building a common-sense system, providing rights to your home state, to decide whether or not to tax that single transaction, is all the Digital Goods and Services bill does. It lets you know who has the right to tax, and frankly, it lets the companies selling the product know exactly what is required by state law.
Digital commerce has become a part of everyday life with 45 percent of internet users having purchased digital goods. The sale of digital goods is a significant contributor to the economy. The purchase of mobile apps in 2019 brought in $92.1 billion is revenue. Although our digital economy is continuing to modernize the laws have not. There is no framework in place for taxing digital purchases and transactions, subsequently leading to duplicative and discriminatory taxes.
Considering how rapidly the digital market is growing, the need for tax ground rules is imperative to provide a clear roadmap for you, for states and for companies required to collect and remit any taxes. It’s simple. It’s as simple as asking your car for directions – and we can then all know what the directions are.
Passage of common-sense guidelines is imperative for the new economy, for the digital world, and to stop relying on outdated ground rules!
-Samuel Whitehorn, Download Farness Coalition