U.S. Senator John Thune (R-S.D.), Chairman of the Senate Republican Conference, today introduced an amendment (#764) to S. 743 to prevent discriminatory and duplicative taxes on digital goods and services, including online downloads of music, literature, and movies. Thune’s amendment would clarify the taxation of digital goods and services, and protect them from unfair and duplicative taxation by generally allowing only a consumer’s home state to tax a digital purchase, and only if that state’s legislature chooses to enact such policies.
“Digital goods and services are a fast-growing and increasingly important part of our economy,” said Thune. “Unfortunately, the rules regarding how these goods and services can be taxed are ill-defined, creating the potential for multiple taxes by different jurisdictions on a single purchase by a consumer. My amendment, which would provide clarity and uniformity in the taxation of digital goods, is good for consumers and job creators alike.”
Thune’s amendment would clearly identify which jurisdiction has the right to tax digital transactions, preventing multiple states from taxing the same transaction. Additionally, the amendment would prevent discriminatory taxes on other services delivered over communications networks from being imposed on digital goods and services. This legislation would not change the current ability of states and localities to impose sales taxes on out-of-state vendors.Thune’s amendment is supported by a growing coalition of business and taxpayer groups, including Americans for Tax Reform, National Taxpayers Union, CTIA-The Wireless Association, American Farm Bureau, and MyWireless.org.