Today, Congress will vote on the Digital Goods Tax Fairness Act, an act which aims to establish a “national framework” for how digital goods and services should be fairly taxed at the state and local levels. Without this bill, consumers could presumably be taxed double and triple on digital purchases. Different states could potentially tax you on one online purchase. That’s not fair, right?
That’s where the Digital Goods Tax Fairness Act comes in to alleviate this impending problem. Rep. Steve Cohen (D-TN) commented, “Digital goods and services are quickly becoming a driving force in our national economy. We need to establish a uniform framework for the taxation of digital goods and services so consumers won’t be double-taxed. Our Digital Goods and Services Tax Fairness Act of 2011 would accomplish such a goal.”
A website for the legislation notes that Congress has a clearly defined role to act in all tax matters that impact interstate and international commerce – particularly when such transactions are highly susceptible to multiple and discriminatory taxation. This is clearly the case with digital goods and services being sold over global IT networks crossing numerous state boundaries.
Rep. Lamar Smith (R-TX) notes, “In our modern economy, more and more consumers are buying digital goods and services rather than tangible goods. While books are still sold in stores across the country, readers can now download hundreds of digital books, newspapers and magazines instantaneously with the click of a mouse from the comfort of their home. But as technology advances, it is important that tax policies do not unfairly penalize consumers who choose to download digital goods rather than purchase their tangible counterparts. This legislation promotes tax fairness and ensures that consumers are not discouraged from purchasing digital goods.”
This bipartisan legislation is essential and Congress should be applauded for addressing this problem early to protect consumers for unfair taxation. Everyone should contact their legislators and urge them to vote for this legislation (S. 971 and H.R. 1860) today.