(Alexandria,VA) – For the sake of consumers, businesses, and the future of America’shigh-tech economy, Congress must clarify the limits on state and local taxationof digital goods and services now -- bypassing newly-introduced bipartisan legislation from Senators Ron Wyden (D-OR),John Thune (R-SD), Lamar Smith (R-TX) and Steve Cohen (D-TN). That’s the urgentmessage the 362,000-member National Taxpayers Union (NTU) conveyed today tofederal lawmakers.
The Digital Goods and Services TaxFairness Act of 2011 (S. 971 and H.R. 1860) would provide important protectionsfor consumers who download products and services using mobile devices.Specifically, the legislation would prevent multiple taxes by clarifying whichstate or local government has tax jurisdiction over such transactions, prohibitdiscriminatory tax rates (e.g., higher than those on other sales) from beingapplied to downloads, and require governments to affirm download tax policiesby statutory law rather than administrative rulings or retroactive“interpretations” of existing policies.
“Americans deserve an insurancepolicy against predatory taxes on items they purchase through downloads, andthe Digital Goods and Services Tax Fairness Act is the ideal tool for thetask,” said NTU Executive Vice President Pete Sepp. “In a mobile world wherethe buyer, seller, and entities facilitating the transaction can be in manyplaces, it’s unwise, unfair, and unproductive to weigh down this importantsector of our economy with numerous, burdensome layers of arbitrary andexcessive taxation. This is especially true at a time when deficit-ridden stateand local governments are often grasping at aggressive but ultimatelydestructive revenue collection strategies to fill their coffers. ”
Sepp noted that the Digital Goodsand Services Tax Fairness Act will be an integral part of NTU’s ongoing agendato enact sensible tax policies toward economic activity that occurs throughinformation age technologies. In 1998, NTU was one of the first organizationsto actively advocate for federal legislation placing a moratorium upon discriminatorystate and local taxes on Internet access. Since that time NTU has soughtsimilar protections for wireless service.
“Although NTU believes that lower,simpler taxes must be an integral part of the interconnected digital world inwhich we live, all Members of Congress, regardless of their goals, should supportthe Digital Goods and Services Tax Fairness Act,” Sepp concluded. “Clear and equitable tax policies are ineveryone’s interest, and this legislation can bring both to a market whosecontribution to our nation’s future prosperity will be critical.”
NTU is a nonprofit, nonpartisan citizengroup founded in 1969 to work for lower taxes, smaller government, and economicfreedom at all levels. For furtherinformation on NTU’s technology and telecommunications tax policy work, visit www.ntu.org.