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is trying to do the same thing for downloaded media. Under the guise that they're protecting the record labels. CNET reports: "It's an issue of tax equity," said Jessica Iverson, a spokeswoman for the Wisconsin Department of Revenue. "If you go into a Main Street business and purchase a CD, you are paying tax."
I know it doesn't seem fair to tax local businesses and not online businesses, but with online businesses you have an extra 'tax' passed onto the consumer in the form of shipping costs. Sure retail businesses pay shipping costs for their stock too, but we don't need more taxes. Even if you do make a sales tax for online purchases, who gets the money? States now can only force reatailers to pay taxes if they have a presence in the state (e.g. the Apple Store in your state, ensures that the online Apple Store will charge you tax). Other states also have a somewhat voluntary system for the consumer. I guess you are supposed to save your online invoices and declare them annually.
So what if the store has no physical presence in your state. Would the store where the store has their offices and warehouse get all the revenue? Sure. Why not. That would only ensure that all online stores move to Delaware or another state that offers tax breaks.
I'd recommend just getting rid of the taxes. This issue seems to be focused on music and movies. We'll get rid of the taxes in retail stores. Its not that hard to do. Grocery stores know what items are taxable and what ones are not. So it shouldn't be terribly hard for stores to exempt media purchases. The worst case scenario would be for those businesses to go offshore to avoid the taxes the same way companies go offshore to Bermuda. Then, you would have some other countries setting up tax shelters for online businesses and the US would start exporting yet more jobs!
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