E-books could be tax boon for states
Tuesday, December 28, 2010
Santa brought the hubby and me lots of old-fashioned books. I am finally going to catch up on the adventures of the Girl With the Dragon Tattoo!
But lots of folks got electronic book devices this holiday season.
Those new-wave readers aren't the only ones happy with their presents. Their state tax collectors soon might be writing the gift giver a heartfelt thank-you note, too.
New state revenue sources: Now that folks have their Kindles, iPads and Nooks, they're downloading e-books.
Expect state tax collectors to have a field day with all those electronic purchases.
Shawn DuBravac, chief economist at the Consumer Electronics Association, says one of the easiest ways for states to refill their treasuries is to tax e-book purchases.
Not only could e-book buyers face a so-called Amazon tax from their home states, but they also could owe the state where the server that's being accessed to download the text is located.
For example, a buyer living in New Jersey who purchases a $10 e-book housed on a server in Texas might pay $1.52 in taxes (7 percent sales tax in N.J. plus 8.25 percent in Texas).
That's not so much on each individual buyer, but add up all the e-reader owners and all the e-books they can buy and state treasurers are hearing cha-ching.
Gadget tax prospects: And don't expect tax collectors to stop at e-books.
All the other gadgets that now are part of most folks' every day life are prime tax targets, too.
The advocacy group MyWireless.org says that so far, 13 states have expanded their sales tax statutes to specifically include digital goods and services in their tax base. They are Indiana, Kentucky, Mississippi, Nebraska, New Jersey, North Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, Wisconsin and Wyoming.
These taxes include the "old" standbys of cable services and cell phones, as well as the ever-growing video game market.
Yep, there's definitely going to be a need for an app to figure out the tax bite on your personal technology.
- Sales tax collection on online purchases:
legislation to ease it, lawsuit to stop it
- Are Amazon taxes costing states money?
- More Amazon taxes advance in states
- State sales tax collections stall
- Amazon, Google and taxes, oh my!
- Money-hungry states, cities tax trolling
- Amazonian sized state tax battles
- State Tax Departments
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I'd hate to see two sales taxes on Ebooks. I love my iPad and part of what makes it great is the cheap books.
Posted by: Kyle @ The Penny Hoarder | Friday, December 31, 2010 at 10:07 AM