Filed under: Analysis / Opinion, iTS, iTunes, Apple
CA lawmakers want to tax iTunes downloads
The California Assembly, apparently facing an $8 billion deficit, has introduced a bill that would apply sales taxes to "media downloads," namely the music sales going through iTunes (which, as we've reported, is challenging even retailer giant Walmart for music sales numbers). But it seems as though (since new taxes require a 2/3 majority in California) they're going about it in a pretty weird way.Basically, to duck the majority rule, they're instead trying to have "digital property" count like normal, taxable property. That way, all they're doing is changing a definition, not actually adding a new tax. Even then, they've got another hurdle to jump -- the California Assembly, of course, can only tax things bought in California, unless they charge a "use" tax, which is for people things buy elsewhere but only use in California. Which no one ever pays anyway. Yeah, it's weird.
Eventually, they'll probably pull something off -- Apple already charges sales tax in quite a few states, so it's not surprising that California, Apple's home base, would try as well. It seems like politics is making the process a little bumpier than elsewhere, though.
[Via Macdailynews]
![TUAW [Cafepress]](http://www.blogsmithmedia.com/www.tuaw.com/media/tuaw-cafepress-promo.png)
Reader Comments (Page 1 of 2)
Tim said 9:46AM on 3-18-2008
I don't know about you but I've always paid tax on iTunes downloads
Reply
miike said 9:50AM on 3-18-2008
"Tim said
I don't know about you but I've always paid tax on iTunes downloads"
Yeah, but I bet California wants to add more tax to that! So you pay your local tax, then a California tax on top of that!
Bob said 11:41PM on 3-18-2008
Another reason to rip all your CDs! Check out the Ripserver that is out today from www.ripstyles.com
miike said 9:47AM on 3-18-2008
In a perverse way, I always get a kick when I see a group of people, see someone or something making money and ask themselves, "How can I make money off this?" Governments (State and Federal) are especially nasty about this stuff.
California seems to want to drive people out of the state, and now, still wants revenue from them. They drove craftsmen (and women) and artists out of the state because they wanted some of that big-time Hollywood movie money, so they enacted tax laws that basically took as much as 50% of income from a particular worker... those self-employed people who make crafts, work in wood or metal or any "artist"-type environment. That included not only big Hollywood movie money, but the guy that makes cabinets, or paints paperback covers, or sews costumes and people that just eeks out a living as any kind of artist hurt in the wallet. So those that could, now live outside California. It made Nevada, Oregon, Montana and surrounding states very attractive. That's why Hollywood stars have other state residences if they can.
I wonder if they collect taxes off sales of downloaded music, that everyone who does so would have to file a California state income tax form? That would be fun. Especially if everybody that did so mailed in a hard copy. Lots more expense of entering data and stuff like that. But y'know California, they have that kinda situation streamlined already. Just ask anybody who sells stuff at a convention in California. It's very easy (and required) for someone in Ohio or Illinois, or Russia, or anywhere else to apply for a California State sales tax permit(s).
Hey... I wonder how *I* can make money off this....
;o)
Reply
Ed said 9:50AM on 3-18-2008
Sorry to interrupt, but in other news not restricted to one state in one country, Apple have updated their browser.
As you were…
Reply
miike said 10:21AM on 3-18-2008
hmmm.. snappier
heeheehee
;o)
robogobo said 10:05AM on 3-18-2008
"a 'use' tax, which is for people things buy elsewhere"
I'm pretty sure they don't tax things for buying people yet. TUAW proofreading shines once again.
Reply
Simon Arch said 12:00PM on 3-18-2008
There is a use tax in California. If you buy something, say a computer in another state for use in California, you're supposed to declare it on your state income tax form, and pay tribute to our wise and mighty masters in Sacramento. This tax is entirely voluntary. You don't have to report or pay it, but heaven help you if you're audited by the state.
robogobo said 2:26PM on 3-18-2008
Simon, I think you read my post too quickly. I'm pointing out yet another TUAW proofreading error. They are claiming "things" are being taxed for buying "people. Funny, eh?
Simon Arch said 5:22PM on 3-18-2008
Gotcha. My bad! :)
Joe B said 10:05AM on 3-18-2008
Thats silly taxing iTunes DL's...
Safari 3.1 released, surely thats news?
Reply
dswift said 10:10AM on 3-18-2008
Wha'? I'm not clear here. In Wyoming I've always paid 6% tax on iTunes, on all Apple purchases.
So Apple doesn't levy sales tax to CA addresses?
Or does this article say that Apple's tune-laden servers may qualify for property tax, somehow applied to each purchase?
Reply
stompy said 10:49AM on 3-18-2008
You're not the only one who isn't clear. This article needs a rewrite.
Justin D said 10:53AM on 3-18-2008
"...they're instead trying to have "digital property" count like normal, taxable property."
You mean, CA residents don't pay sales tax for iTunes purchases? What the f**k! It's time to join the goddam real world and get pwned by taxes every chance you get.
Reply
JeFF said 12:05PM on 3-18-2008
Digital property counting as real property? Oh joy, now someone's island in Second Life can get taxed as real estate, and all those WoW weapons some kid in California has been hoarding can get taxed (remember the report that EverQuest was something like the 100th largest economy in the world at its height?), .
That, CA legislature, is why you actually put through the tax bill instead of redefining whole concepts. It's tougher initially, but much smaller can of worms in the long run.
artifex said 11:07AM on 3-18-2008
Amazon doesn't charge tax in their MP3 store for those states you mentioned, do they?
Reply
alex said 11:30AM on 3-18-2008
Good!
If it was up to iTounes and Apple Inc. They would charge u s to turn the iPhone on and off LOL! That goes for iTunes aswell hehehe!
http://hacktheiphoneitouch.blogspot.com/
Reply
brian said 11:33AM on 3-18-2008
Your graphics department must have been up all night creating that masterpiece!
Reply
kc! said 12:10PM on 3-18-2008
BOOOOOOOOOOOOOOOOOOOOOO!
Reply
Austin said 11:54AM on 3-18-2008
Thats messed up. I agree with mike. How can we take advantage of, oh, i dont know, everyone. Who doesn't buy online media? My GRANDPARENTS do. Another group tryin to make money thats all.
Reply