A more pertinent tax issue: iTunes Tax

[vansmack]

Also in the the NY Governor's propsal was a tax on iTunes downloads.

I'mnot sure how Apple has escaped this, to be honest.  Once the Apple Store took root in certain jurisdictions, I'm amazed other states haven't jumped on this.

[sweetcell]

it's a purchase like any other, i share your surprise that other states haven't gotten on this boat earlier.

unfortunately i foresee a quiet but short death for this thread.  no bigotry, no racism, no homophobia, and no opportunity to spew anti-obama catch-phrases.  this may be the only reply you get.

[vansmack]

I hear you - just a thread about taxing music downloads on a music message board.  Nothing exciting.

[walkonby]

you know, obama will surely support this because money is good money versus no money, and he had a racist pastor and deals with blacks (and whites) who spew hate at him because he might not even be black, and the bastard even has an ipod.  there, all your bases covered.

[vansmack]

the bastard even has an ipod.

What, you don't remember Zunegate?

*Before you all start bitching at me, I know it wasn't his and that he borrowed it from somebody.  He does in fact have an iPod.

[Venerable Bede]

insert statement against taxes and government spending. . . .

i might add that i don't understand what the relevance of having an apple store in the state does for taxing music downloads.  itunes is a separate store-front than the apple store. . .anyway, i thought i was already being taxed by the state on these purchases (and that was before moving to california, which i get, since apple is incorporated here).

[vansmack]

If Best Buy doesn't sell the product in the store, do you still pay taxes when you buy it online?

Do you pay tax on software when you download it instead of buying the retail package?

Why is a digital music file any different?

And yes, let's not discuss the issue of taxes as a philosophy, let's stick to the issue of taxing digital downloads.

[Venerable Bede]

If Best Buy doesn't sell the product in the store, do you still pay taxes when you buy it online?

Do you pay tax on software when you download it instead of buying the retail package?

Why is a digital music file any different?

And yes, let's not discuss the issue of taxes as a philosophy, let's stick to the issue of taxing digital downloads.

i get the best buy example, but that would apply only if i'm buying apple hardware or software from the apple store. . .music downloads from itunes, to me, is a different type of purchase all together.  there is no "brick and mortar" storefront for itunes, and it seems to me to satisfy being excluded from state taxation.  the digital file is different precisely because of the vagaries in federal/state jurisdiction. . .i was going to use the example of electricity regulation, but it's just too confusing.

secondly, does this tax only apply to itunes, or would it apply across all platforms, including, for example, emusic? 

[xneverwherex]

only itunes was mentioned initially, but i think it probably will apply to all platforms. then again theyre taxing everything else - so im sure its not only itunes.

[vansmack]

i get the best buy example, but that would apply only if i'm buying apple hardware or software from the apple store. . .music downloads from itunes, to me, is a different type of purchase all together.  there is no "brick and mortar" storefront for itunes, and it seems to me to satisfy being excluded from state taxation.  the digital file is different precisely because of the vagaries in federal/state jurisdiction. . .i was going to use the example of electricity regulation, but it's just too confusing.

secondly, does this tax only apply to itunes, or would it apply across all platforms, including, for example, emusic? 

The recipient of iTunes profits is Apple Inc. so they cannot hide behind the sham of a "different storefront" otherwise Best Buy would not sell it's items via BestBuy.com, instead opting for a different name/sham online store. 

It's the same reason that Amazon resellers who sell via Amazon now pay tax in jurisdictions where they operate a business or have significant interests (notice I specifically didn't say "Store Front").

The difference between the file type vs physical media is exactly what digital file sellers have been arguing, however that doesn't work for software purcahsed via download - you are taxed based on the purchase of software, not the delivery method.  I have always found it odd that digital music files have been "exempted" so to speak.  Obviously, because of the "vagaries" you described, New York is simply making the tax law more clear to include something that I am simply saying should have been taxed all along, because the vagaries only exist in the minds of people who are afraid/unaware of the technology - it's really no different than a wave file on a CD except there's nothing to touch and people freak out.

And no - it's not just iTunes (although I have a tough time seeing how they could apply the NY sales tax to Amazon, with Amazon Inc. having no ties to NY), and as a matter of fact it's not just music files:

"The new tax would apply to ?digital products? ? including ?MP3 music files, ring tones, movies, digital books, digital photographs, downloaded and online games, and other entertainment services? ? that are delivered ?via wire, cable, fiber-optic, laser, microwave, radio wave, satellite, or similar or successor media, or any combination thereof.?

The new sales tax would not apply to custom computer software, telecommunications services, digital storage, cable or satellite television programming, or satellite radio programming. But that tax would apply to ?pay-per-view or on-demand movies sold by a cable or satellite television provider for a separately stated charge.?

Linkage

And for the record, I don't think pay-per-view and on-demand should be included because they are not being purchased to keep, simply to watch in a defined period of time, and that's providing a service (more like renting), not a purchase.  I don't believe businesses providing those services are normally taxed in NY.

[Venerable Bede]

all i'm really wondering is how does the state purport to have tax jurisdiction over the means, when it's arguable that a lot of it is interstate commerce. . .that's all.  the court hasn't addressed this specific point over federal/state jurisdiction for online tax collection. . .instead, it's been leaving it up to a) the retailer, which is how we get to the in-state presence tax collection, or b) taxing it, but leaving it up to the consumer to be honest about it on their tax returns. . .i don't see how itunes isn't operating in interstate commerce. . .and that's a difficult question to answer, and the gist of what i'm wondering.

what this tax measure is really doing is trying to enforce a collection- how many people put a number on that line of their state tax returns, provided there's a line, about their purchases online?  or for those that live in d.c., how many people give d.c. a value for purchases outside of d.c., so d.c. can recover those lost taxes.. . .

[xneverwherex]

i could understand the stupid 'ipod tax' as its now being deemed. but what about taxing on cable (arent we already taxed by TWC enough as it is - i guess this is a 'new' tax), sporting events and even going to the movies. i believe netflix already has tax added onto their service, but does this ever end.

the mta is just another nightmare mixed in with all this - with needing to raise fares a ridiculous amount. if you live in manhattan you pay as much to go one stop as you pay to go 30 stops. right about now im thinking WMATA/BART, etc got that right.

maybe nyc needs to copy california with whatever happens there. it seems cali is in as much a dire situation as ny is.

[vansmack]

all i'm really wondering is how does the state purport to have tax jurisdiction over the means, when it's arguable that a lot of it is interstate commerce. . .that's all. 

Clearly you have never read Quill v North Dakota.  Simply operating in interstate commerce is not enough to be exempt from Taxes.  Congress set the rules that said if a state could show a nexus between the Corp and the State in can force them to collect taxes on behalf of the state.  Even your boy Scalia agrees with this (that Congress has the power to alter the Commerce Clause) and a physical presence in the state more than meets the nexus requirement.  Thus, having an Apple Store in the state is WAY MORE than enough to meet the physical presence test.  Apple didn't argue this for one second when New Jersey (or the other 20 states that include music downloads in their tax code) passed their itunes Tax.

I've never met somebody who was so opppsed to taxes but so in favor of paying lawyers obscene amounts of money simply to decide if "mail-order," "phone-order" and "internet order" (or e-commerce as you have described it) are so different as to warrant a court to decide that e-commerce should be treated the same as mail-order and phone-order.

Your argument that e-commerce is somehow different from mail-order is simply asking the courts to expand their decision to include transactions over the internet (or Congress could act, I suppose), but why bother?  Is it really that much different that phoning in an order?

[vansmack]

but what about taxing on cable (arent we already taxed by TWC enough as it is - i guess this is a 'new' tax), sporting events and even going to the movies.

This, however, is a much more insightful gripe.  I agree that NY is over extending themsleves with the on-demand and pay-perview tax unless they already have a rental service tax (which you seem to think they might).  The argument for/against service taxes not withstanding, if NY does not have a service tax on rental companies, then they should not tax digital rentals.

Sporting events taxes in NY are fine with me as well, because it's Yankees, Mets, Rangers, and Knicks fans bearing the brunt of that and I don't like any of those teams.  Buffalo should be exempt though. 

maybe nyc needs to copy california with whatever happens there. it seems cali is in as much a dire situation as ny is.

Be careful what you wish for....

[xneverwherex]

but what about taxing on cable (arent we already taxed by TWC enough as it is - i guess this is a 'new' tax), sporting events and even going to the movies.

This, however, is a much more insightful gripe.  I agree that NY is over extending themsleves with the on-demand and pay-perview tax unless they already have a rental service tax (which you seem to think they might).  The argument for/against service taxes not withstanding, if NY does not have a service tax on rental companies, then they should not tax digital rentals.

Sporting events taxes in NY are fine with me as well, because it's Yankees, Mets, Rangers, and Knicks fans bearing the brunt of that and I don't like any of those teams.  Buffalo should be exempt though. 

maybe nyc needs to copy california with whatever happens there. it seems cali is in as much a dire situation as ny is.

Be careful what you wish for....

i was meaning to imply, last i checked californians yet havent started taxing regular soda and also having to put calorie counts everywhere. and i somewhat believe schwarzenegger must be able to come up with a better plan than paterson.

i must say tho - there are definitely a lot of fat people that live in manhattan. you would think that with all the walking we do (and most people do in fact do that), theres still a good population that is obese. not that im saying Paterson needs to control what we eat. I fully believe that chocolate cupcake I just ate, was fully worth all the calories i gained. i will also be walking home soon so.....

smackie - out of curiosity im going to look at my cable bill to see the breakdowns of how we're taxed: i have no clue what hbo and pod is?? maybe an ondemand charge?

12/22-01/21 HBO And Pod
 $14.95 
-View Taxes and Fees
       
12/12 Franchise Fee $5.21 
12/12 FCC Regulatory Fee - Cable $.07 
12/12 Federal Universal Service Fund $.82 
12/12 State And Local Sales Tax $2.63 
12/12 State And Local Telecom Excise Tax $1.76 
12/12 State Gross Receipts Tax $.12 
12/12 E-911 $1.00 
12/12 Mctd (186e And 184) $.29 
12/12 Regulatory Recovery Fee-federal $.10 



as far as netflix - heres my monthly charge: $16.99 $1.42 $18.41  tax is the middle item.

and netflix is definitely taxed. i thought that was everywhere, but maybe not? although i dont understand if i already pay for HBO why would I pay an extra tax to watch HBO on demand? or is that not the same?

btw - what im most pissed about - a movie theater tax. now thats ridiculous. esp with movies $14 as it is. at that price im much more picky about what i see - you add taxes to it - and theyre talking 18% fuck no!