The World According to Nick
My take on Software, Technology, Politics, and anything else I feel like talking about.
Tuesday, March 08, 2005

The Wisconsin iPod Tax 

Buried in the Governor's budget proposal in the hopes nobody would notice was a prosoal for a sales tax on Internet downloads:

Gov. Jim Doyle wants you to pay Wisconsin's 5% sales tax whenever you pay to download a song, book, movie or piece of art.

A little-noticed provision of the Democratic governor's proposed state budget would extend the sales tax to those Internet transactions, officials said Monday. There would be no Internet sales tax police, however, because compliance would be on the honor system.
...
A Legislative Fiscal Bureau summary of Doyle's proposal says it would extend the 5% sales tax to "audio works," including music, books on tape and pre-recorded speeches; "audiovisual works," including movies, music videos and live events; "finished artwork," including paintings, designs and photographs; and "literary works," including books.
...
Now, Wisconsin taxpayers are supposed to estimate what sales tax they owe on Internet and mail-order purchases, and voluntarily pay it when they file their income taxes. Compliance is "very low," Morgan conceded.

A few things confuse me here. The tax would have to be paid on books on tape? You do understand that you can't download a tape right? Do you understand how computers work? It's not like you order the tape, and then you can watch this fat bulge travel through the telephone cord and pop out your floppy drive. Have you ever actually bought anything on the Internet Gov. Doyle? They also reference "finished artwork" and "literary works" including books. This doesn't sound like a tax on Internet downloads to me. This sounds like a full fledged tax on Internet purchases of things that are mailed to your home. This isn't an iPod tax, this is an Amazon.com tax. Maybe I'm completely wrong here, and the Journal article just has a lot of very poor quotes. It certainly wouldn't be the first time.

What's more, people are already supposed to voluntarily pay tax on all these items right now. So is this tax supposed to be over and above what you're already supposed to pay when you file for income tax, or is this separate... in which case what's the point?

What I'm afraid of is that law will apply to all Internet purchases and that Wisconsin will decide to enforce it like other states are starting to enforce cigarette taxes. Will Wisconsin subpoena Amazon.com for all records of Internet purchases to Wisconsin residents like Michigan is doing with Internet cigarette retailers?

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Name: Nick
Home: Wauwatosa, WI, United States

I'm a Software Consultant in the Milwaukee area. Among various geeky pursuits, I'm also an amateur triathlete, and enjoy rock climbing. I also like to think I'm a political pundit.


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