Digital Taxes May Be Coming Your Way

Digital Media Taxes - Quicken Loans Zing Blog Benjamin Franklin once said the only two certainties in life are death and taxes. Death, sure, nothing’s changed there. But times are different now and our modern lives, heavily infiltrated with technology, are changing up the tax game. The creation and expansion of online shopping combined with the incredible availability of digital services has transformed the Internet into a source of taxable products. Instead of paying a little extra for only the tangible goods bought in-store, clicking “buy now” could start to dig a bit deeper into your wallet.

The federal government charges all American citizens the same uniform taxation fees, but each state individually imposes its own set as well. The existence and amount of sales tax on tangible goods today depend on what state the purchase takes place. The Marketplace Fairness Act, approved by the Senate in May and now being considered by other federal lawmakers, would change some of these regulations to include the World Wide Web.

45 states (and the District of Columbia) currently charge sales tax. If this new legislation is passed, residents within these states will also be required to pay sales taxes for online purchases. At present, online retailers are only required to charge taxes in states where they have a physical presence such as a store or warehouse. Under the Marketplace Fairness Act, any retailer that reaches sales of $1 million in states without a physical location will also require digital taxes. Today, nearly 25 states already charge tax on digital goods and more than a dozen have recently implemented laws specifically targeting online products.

All potential changes are ultimately to be decided by each state. For example, where some presently charge a tax on downloaded TV, others only charge for live streaming video. The sales tax on a $12.99 album from iTunes ranges from 52 cents in Wyoming to 91 cents in Mississippi. E-books, which created revenue of $3.04 billion in 2012, levies a 70-cent tax for a $9.99 purchase in Vermont and 47-cent tax in Utah. Luckily, the expansion of where and how taxation is implemented won’t bring about an increase of existing taxes.

You can contact your state’s tax and revenue agency for information regarding your current fees and possible tax changes. Click here for a map with links to all 50 websites to learn more.

 

Stay Connected How you want, when you want

SUBSCRIBE

See the latest from ZING

,

No comments yet.

Leave a Reply

Connect with Facebook