Federal Framework for Digital Taxation Introduced - Don't (Unfairly) Tax My Download


On June 30, 2010, Rep. Rick Boucher (D-VA) and Rep. Smith (R-TX) introduced HR 5649, the Digital Goods and Services Tax Fairness Act of 2010 (the Act). The legislation, when enacted, will create a framework for state and local taxation of digital goods and services, and will prohibit multiple and discriminatory taxation of such goods and services. The purpose of the bill is to foster consistency in state sales and use taxation of electronically delivered goods, such as software, music, movies and books, and services such as cloud computing.

The bill does not seek to prohibit taxation of digital goods and services. Rather it would set guidelines for any state or local jurisdiction that sought to impose such tax providing certainty to the consumers of digital goods and services. By doing so, the bill would prevent multiple jurisdictions from each claiming the ability to tax the same transaction and would ensure that tax rates applicable to such transactions are not higher than the rate generally imposed on sales of goods.

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