[Wall Street Journal] "States are looking to tax digital goods, streaming AND cloud computing"

[-DMP-]

With sales of DVDs, videogames and traditional packaged software slumping for years, more state and local governments are eyeing technologies, such as streaming video subscriptions and cloud computing, to help make up for hundreds of millions of dollars or more in lost revenue.

Applying age-old sales taxes to the era of new media hasn't been simple. States have long taxed tangible goods, but the broad array of new digital products often don't fit the category. Some states are trying to use existing laws, while others are taking on the politically thorny task of rewriting tax rules.

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Last month, Tennessee extended its 7% sales tax to software and digital games that are accessed remotely. Meanwhile, Chicago is one of the first cities to wade into taxing digital goods, requiring in the coming months local taxes on cloud computing and streaming entertainment.

But Alabama lawmakers recently shelved its own “ Netflix tax” after months of study, and Vermont ended an effort to levy taxes on cloud computing after finding the technology was more akin to a service than a tangible good.

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Annual US spending on sales and rentals of DVD and Blu-ray discs have fallen to slightly more than $10 billion from a peak of $20.2 billion less than a decade ago, according to data from Digital Entertainment Group, a trade association. Sales of CDs have seen an even sharper decline, with data from the Recording Industry Association of America showing record-company shipments fell to $1.9 billion last year from $13.2 billion in 2000. Sales of videogames also have fallen steeply in recent years.

States have likely lost hundreds of millions of dollars a year in tax revenue from those three items, perhaps more than $1 billion. Not all states assess sales tax, and in the 45 states that do, rates range from less than 3% to more than 7%, when local taxes aren't included.

As CD and DVD sales have fallen, first downloads and then streaming subscriptions have notched rapid growth. Netflix Inc., for instance, drew in $2.01 billion in sales in this year's first half from its US streaming video business. The company says its offerings are currently taxable in roughly half of US states and certain municipalities.

Another fast-growing area that could bolster state coffers is cloud computing, an amorphous term that includes renting online computing storage and using remote Internet-connected servers for number crunching. Gartner Inc. projects the cloud-computing market in the US will reach $115 billion next year, which includes business processing, infrastructure and security

Dudes coming for that money

 

[-DMP-]

http://si.wsj.net/public/resources/images/NA-CG899_TECHTA_16U_20150820145708.jpg

States Eye Taxes on Streaming Video and Cloud Computing

 

[ahomeplateslugger]

States Eye Taxes on Streaming Video and Cloud Computing

at the sale for CDs.

all good things must come to an end, until something better comes along

 

[Rekkapryde]

Streaming?

 

[Malta]

America: Home of the free, land of the "fukk, we're not getting over on them anymore? Find a way to tax them for air!"


VPN business is about to boom.

 

[Leasy]

This nut ass government didn't even legalize sports betting yet and now they taxing digital shyt really. It's digital wtf. How can you tax digital brehs.

 

[Maddmike]

They may be too late by the time this passes. I dont even see a use for netflix anymore with all the streaming sites popping up lately ....I even got my mama doing yify and she's 60.

 

[lamont614]

This nut ass government didn't even legalize sports betting yet and now they taxing digital shyt really. It's digital wtf. How can you tax digital brehs.

this

 

[Liquid]

America: Home of the free, land of the "fukk, we're not getting over on them anymore? Find a way to tax them for air!"


VPN business is about to boom.

What VPN are you using

 

[GoldenGlove]

 

[Kartel13]

Government has to make money one way or another. I see their argument. If they don't tax digital, they'll just raise something else.

 

[Tunez]

 

[daze23]

states need money too

 

[Malta]

What VPN are you using

I was using Private Internet access, TorGuard and ivpn.

I'm going to build a desktop separate from my gaming/media PC that's built on Linux and doesn't rock with snitching ass windows 10 Also get a dual router setup, where one router is setup and always connected through your VPN.

 

[ORDER_66]