CNNMoney.com

Companies Economy International Corrections Pre-market Trading After-hours Trading Winners/Losers/Actives Bonds Currencies Commodities World Markets Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Ask the Expert Ultimate Guide to Retirement Retirement Calculators Best Funds Ask the Mole Best Places to Retire Big Tech Blog Techland Blog Sectors and Stocks Fortune 500 Techs Tech Talk 100 Best Places to Launch Ultimate Resource Guide Small Biz Makeovers FSB 100 Ask & Answer Fortune 500 Technology Investing Management C-Suite Rankings Main Create Portfolio Edit Portfolio Create Alerts Edit Alerts
    SAVE   |   EMAIL   |   PRINT   |   RSS  
Taxman! Hands off my downloads!
New Jersey wants tariffs on online music sales. Could this be the start of something big?
June 24, 2005: 2:23 PM EDT

Sign up for the Eyeopener e-mail newsletter

NEW YORK (CNN/Money) - They want to tax my Who. And my 3 Doors Down. And my Dr. Hook and the Medicine Show.

Sure, if I had their albums I'd have already paid the tax. But I don't. I got their songs from the Internet ... Napster (the legal one) and iTunes, to be exact. And I listen to the songs a lot.

But now my state legislators, some of them at least, are talking about taxing my downloaded songs. Yep. A budget committee in the New Jersey legislature just approved a measure that would slap the state's 6 percent sales tax onto music downloads. So my Alan Jackson download would go from $0.99 to $1.05. This and other tax moves ... like taxing gym memberships ... would add $175 million to state coffers.

Now I understand some of the logic for imposing taxes on Net-based sales. The bricks and mortar guys have to collect sales taxes, so why shouldn't the folks who compete with them over the Internet?

Except that my local Sam Goody won't sell me the Grace Jones single I want. I have to buy the whole CD. And the local bookshop isn't going to deliver the next Harry Potter to my door. I'm paying Amazon and FedEx (indirectly) for that.

"They're trying to tax ether!" squawked a libertarian colleague of mine. I don't know if I agree with that. Digital or not, my Guns N' Roses still sounds real to me.

Yes, the drumbeat for Internet sales taxes is growing. States need the money. Some are already making a stab at getting it at tax time.

Nevertheless, the song sellers don't seem too worried.

"It is premature for us to comment on the implications of a proposal that has not yet been accepted," Napster wrote in an email response to my queries. "However, this is among the issues we are monitoring for future developments."

Apple had no comment. Guess this isn't enough for them to think different on.

And so my songs are probably going to get taxed. But there will be a fight first. The governor of Wisconsin pushed a similar proposal, but it went down in flames last May. That gives me hope for New Jersey, where the final votes have not yet been taken.

Maybe the gym guys will stop it.

____________________________________________

Allen Wastler is Managing Editor of CNN/Money and appears weekends on CNN's "In the Money." He can be emailed at wastlerswanderings@cnn.com.  Top of page

graphic


YOUR E-MAIL ALERTS
Wastler's Wanderings
Taxation
Manage alerts | What is this?