Democratic politicians in state capitols are more likely
than Republicans to permit a tax on digital purchases of songs and movies.
Although most states have overlooked taxing digital
downloads, such as iTunes purchases, politicians and tax collectors are eyeing
the area as an untapped source of new revenue as online purchases boom.
New Jersey Gov. Jon Corzine, a Democrat, proposed in his
budget that "downloaded music and videos" should be taxed starting October 1. The state tax agency expects legislation to be introduced in June.
Pete Sepp, Vice President for Communications at the National
Taxpayers Union, a nonpartisan group that advocates lower taxes, argues that
digital downloads are already being taxed when users pay telecommunications
taxes for using dial-up, DSL, or a cable modem to access the internet. "Obviously we need to start
considering limits on this sort of taxation," Sepp said.