main
Report a problem

North Carolina to impose a digital download tax?

ynnoj   on 29 January 2009 - 08:44, updated 29 January 2009 - 14:48 · 32 comments & 5476 views

Advertisement (Why?)
As part of their plans to modernise the state's tax code, North Carolina legislators are considering introducing digital download tax charges.

According to reports, such a measure could increase revenue by up to $12m, which in perspective to the state's current $20bn budget deficit, is a nominal amount. Items, including music, movies and video games, would all be affected by the changes, which Rep. Paul Luebke thinks is justified:

"We used to think of everything in terms of being tangible. Nobody thought of how you could possibly download anything. So if you buy a book in a bookstore, you're going to have to pay sales tax on it. If you're downloading a book from a book seller, you should have to pay sales tax on that as well."

North Carolina isn't the only state considering such tax amendments. Last month, New York officials confirmed a proposition to introduce an 'iPod tax' was being contemplated. These reports only demonstrate that it's not just the private sector that has been hit hard by the deepening recession.

Post a comment · Send to friend Comments · There are 32 additional comments
(6 replies) #1 leesmithg on 29 Jan 2009 - 15:09
Like trying to drain blood from a stone.

You work, you pay taxes, you drive a motor vehicle you pay taxes on using the roads and fuel you put into the vehicle, which is used to get you to work to pay taxes for working.

Then you want to buy something to which you pay taxes to the country of origin then your country want to tax you more.

Squeeze, squeeze, squeeze.

I don't condone piracy, thats what will happen.

Last edited by leesmithg on 29 Jan 2009 - 15:34
#1.1 Sebaz Vista on 29 Jan 2009 - 15:18
I fully agree. It's disgusting how the state and the federal government keep squeezing us. Luckily for me I don't download music because I find it a rip-off to spend $1 in a song that's encoded at 128 kbps and even worse with DRM restrictions, so even though I live in NC this won't affect me.
#1.2 ChrisJ1968 on 29 Jan 2009 - 17:44
we wouldn't have these problems if EVERYONE paid their fair share. Corporations and private citizens could fix the problem by paying their fair share.


#1.3 Pam14160 on 29 Jan 2009 - 18:31
Chris would you please explain what you mean by their fair share>
#1.4 +stifler6478 on 29 Jan 2009 - 18:37
Sebaz Vista said,
I fully agree. It's disgusting how the state and the federal government keep squeezing us. Luckily for me I don't download music because I find it a rip-off to spend $1 in a song that's encoded at 128 kbps and even worse with DRM restrictions, so even though I live in NC this won't affect me.


Zune Marketplace music is encoded at 192 or higher, and if you have a Zune Pass (and maybe even if you don't, I'm not sure), and use the song credits you get with the pass, it's DRM free.

Just putting that out there.

I don't like taxes as much as the next guy, but I can see where they're coming from. More and more things are going digital and it's something the government just hasn't had to look at until recently.

-Spenser
#1.5 naap51stang on 29 Jan 2009 - 20:00
Amen! The only FAIR tax would be the fair tax. A consumption tax. You don't buy anything, you don't pay tax. A rebate for food etc so "the poor" are not affected. Almost every item has a "built in" tax of 22-23%, so you put a 22-23% sales tax on everything, and the built in tax goes away. In other words, a $100 item before the fair tax cost $100 after the tax. The amount of overseas money that is hidden away because of the unfair tax code now, would flow back to the USA, and you wouldn't be able to build enough factories to house the companies that would want to build here.
http://www.fairtax.org

Pam14160 said,
Chris would you please explain what you mean by their fair share>

#1.6 Joshie on 30 Jan 2009 - 02:52
This is a state level tax, however, that NC is proposing. The Fair Tax, as I understand it, was federal level. We could implement the Fair Tax and North Carolina could still have whatever taxation system they like in place on top of it.
(4 replies) #2 spacer on 29 Jan 2009 - 15:26
I don't really understand. Are they talking about taxing specific products or are they talking about charging people a premium for the amount of down-bandwidth they use? The former is already there, I get a sales tax for stuff I buy online (I live in CT) so it would be nothing new if this were the case. And the latter seems like a totally unfair way to drain even more money from the economy.
#2.1 SirEvan on 29 Jan 2009 - 16:41
they want to tax the download it's self...so if you buy a game on steam, or you opt for a digital download (think pdf) instead of hard copy of something, you get a tax.
#2.2 Pam14160 on 29 Jan 2009 - 18:34
Ok, so if I play W Of W on line does that mean they will determine a way to tax my time or the amount I pay per month?
#2.3 naap51stang on 29 Jan 2009 - 20:05
Don't worry...today they "only" will tax music, movies, games. When they get that in place, then they will hook up a digital "meter" like a gas or water meter to charge you for every bite you download.
Never in the history of recorded civilization, I bet you will not find one time that a government has done with LESS tax revenue, or canceled a government agency.
#2.4 Jebadiah on 29 Jan 2009 - 22:43
naap51stang said,
Don't worry...today they "only" will tax music, movies, games. When they get that in place, then they will hook up a digital "meter" like a gas or water meter to charge you for every bite you download.
Never in the history of recorded civilization, I bet you will not find one time that a government has done with LESS tax revenue, or canceled a government agency.



Oh good! So I can still continue watching movies and stuff without paying any of this "new tax".
#3 +techbeck on 29 Jan 2009 - 15:27
This is just another way gov and companies are tried to drain people dry. Everyone is losing $$$ the way the economy is going so people companies and the Gov are trying to tax citizens more and more instead of doing things to make themselves run more efficient to save money. All its going to do is **** people off. So people will either stop buying stuff online as much, or find other ways of getting what they want.
(1 reply) #4 DJDY on 29 Jan 2009 - 15:33
Forgive me if I am wrong, but don't certain online sellers charge sales tax for the buyer's respective state? When I buy things from Amazon.com I surely pay NY sales tax.

After the Great Depression, FDR's New Deal was doing wonders for the country. However, few years down the road FDR freaked out, and decided to increase taxes to cover for his spending, which put the country into the second part of the depression, until WWII arrived. Moral of the story, increasing taxes during a recession is moronic.
#4.1 leesmithg on 29 Jan 2009 - 15:36
When I buy from the net (download), I pay that countries v.a.t. rate, usually 19%-20%.

When I buy from amazon.co.uk I pay 17.5% v.a.t.
#5 rpgfan on 29 Jan 2009 - 15:51
In other words, those 99-cent iTunes songs won't really be 99 cents anymore...

And who will assess the tax? The ISP? Where is the line drawn when the term "downloading" is mentioned? After all, my cable modem needs to download stuff from my cable provider in order to connect to the Internet. What if an ISP is having network troubles? Between fiddling with the gateway and the ISP trying to fix their own equipment, the gateway would download things properly...over and over....
(3 replies) #6 Shane Pitman on 29 Jan 2009 - 15:52
It all goes back to intellectual property and digital media being viewed as actual property or not. If intellectual property is indeed viewed as a legitimate tangible item, then when a consumer purchases an item from an online retailer, should that merchant not charge them the appropriate state sales tax? Everyone should have known that with the push to make intellectual property something of real, tangible, legal value that the government was going to demand a piece of the pie just like they do with every other form of property.
#6.1 nmesisca on 29 Jan 2009 - 16:29
Shane Pitman said,
It all goes back to intellectual property and digital media being viewed as actual property or not. If intellectual property is indeed viewed as a legitimate tangible item, then when a consumer purchases an item from an online retailer, should that merchant not charge them the appropriate state sales tax? Everyone should have known that with the push to make intellectual property something of real, tangible, legal value that the government was going to demand a piece of the pie just like they do with every other form of property.


fine for me. but once I pay that tax then it is finally my property and will be able to distribute to who ever I want completely free. That ok then?
#6.2 themousepad on 29 Jan 2009 - 16:41
"fine for me. but once I pay that tax then it is finally my property and will be able to distribute to who ever I want completely free. That ok then?"

I seriously doubt it... you buy a car, pay tax on it, sell it to someone else. they pay tax on it, they sell it and tax is paid again, and again and again. Leagally anything you sell is supposed to be claimed and tax paid on it. Any Item sold through retail chanels whether taxed previously or not requires a tax to be charged again at the state level. Even personal property that you purchase from your neighbor is supposed to be claimed so the state can charge you a personal property tax. .. so while you MIGHT get away with it.. You might not if... there becomes a way to track how many times the program has been downloaded to your friends and their friends and so on... kinda like some download cookie... This is just hypothetical but it would not surprise me that the government figure out some way to do this as well.
#6.3 nmesisca on 29 Jan 2009 - 16:56
themousepad said,
"fine for me. but once I pay that tax then it is finally my property and will be able to distribute to who ever I want completely free. That ok then?"

I seriously doubt it... you buy a car, pay tax on it, sell it to someone else. they pay tax on it, they sell it and tax is paid again, and again and again. Leagally anything you sell is supposed to be claimed and tax paid on it. Any Item sold through retail chanels whether taxed previously or not requires a tax to be charged again at the state level. Even personal property that you purchase from your neighbor is supposed to be claimed so the state can charge you a personal property tax. .. so while you MIGHT get away with it.. You might not if... there becomes a way to track how many times the program has been downloaded to your friends and their friends and so on... kinda like some download cookie... This is just hypothetical but it would not surprise me that the government figure out some way to do this as well.


thats because you sell the car, so you make a profit. if I give away my car for free to a friend he will have to pay registration/tax only when they expire. Also tracking how many times has been downloaded is not feasible as I can store my files on my home server, that will skew the download counter already.
(1 reply) #7 iamwhoiam on 29 Jan 2009 - 16:06
A war was fought over crap like this. Time for it again.
#7.1 GreyWolfSC on 29 Jan 2009 - 16:42
iamwhoiam said,
A war was fought over crap like this. Time for it again.


Somewhat agreed... Where's the representation in exchange for this tax?
#8 sava700 on 29 Jan 2009 - 16:10
This is something that can't be allowed in any state cause it will continue to others if not stopped.
#9 SAXD on 29 Jan 2009 - 17:10
As a North Carolina resident...

This is totally rediculous. This is just more of the same, Raleigh can't manage or balance a budget to save their collective asses. What worthless attempt to try to generate more tax revenue when everyone in the state (and country) is already hurting. Sales taxes of online services/goods are legally required to be declared when you file your taxes anyway.

Raliegh needs to wake up, and get over this spend, spend, spend, tax, tax, tax behavior. NC has the highest gas/road use taxes in the southeast US, and still the roads are garbage -- potholes, rough surfaces, etc. As soon as I cross the SC border, the interstate becomes much better.

These ass clowns in Raleigh should have been voted out last November.

Edit: And yes, I am mad. The state already takes farrrrr too much of a chunk of my pay.

Edit 2: Anyone else following the state news that the NC state/government employees (including teachers) health care fund is OUT OF MONEY??! BROKE! Another example of the clowns in Raliegh.
#10 MadDog on 29 Jan 2009 - 17:52
That's exactly what you do during a recession -- increase taxes! Because as we all know, the government is best suited to spend the money you earn. These politicians are idiots!
#11 C_Guy on 29 Jan 2009 - 17:54
I don't really get it. When I buy stuff for download (like MP3's) I pay the taxes online when I make my purchase, how is this anything new?!!?
#12 Aahz on 29 Jan 2009 - 18:13
Sounds like a good way for North Carolina to test their "official" websites/servers for security issues as something like this would leave them hacked to bits soon enough.

#13 Pam14160 on 29 Jan 2009 - 18:42
The problem I see is that the big companies can put tax applications in place rather easily, however, the hundreds of shareware providers are going to have a rather large task ahead of them attempting to put in some kind of application that can be used to calculate all the states and their tax needs. Some states have a state tax then allow the counties to add a tax on the states'; now you have an even bigger problem.

Guess we'll all have to install Quickbooks.
#14 BottleTop on 29 Jan 2009 - 22:27
If they want to tax me for downloading something, then it must mean I'm buying it, right? If that's the case, I own what I'm downloading (like a book). Then ergo, I don't think they have the right to put DRM on the things I buy, just like they can't tell me that I can't give a book I own to someone.
#15 Turion on 29 Jan 2009 - 22:44
I hope my download has a money back garrantee. So I can get my tax back too.
#16 war on 30 Jan 2009 - 03:39
Mark my words!

One day, you will in fact own nothing, not even you. Everything will be rented out in one way or another!

God I hope I'm wrong. Oh ****, there is no God. Dawn, we are all ****ed!!

#17 rakeshishere on 30 Jan 2009 - 09:46
Pay and download ? But i already pay to my ISP

Commenting has either been disabled on this article or you are not logged in. Click here to login or register, its free!

Note: Anonymous commenting is disabled in order to keep the quality of responses to a high standard.

Advertisement (Why?)