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News
New Jersey Adds Music Download Tax
Tuesday, October 3rd, 2006 at 3:00 PM - by Jeff Gamet
As of October 3, New Jersey residents started paying higher sales taxes - and on a wider range of items, including digital music and video downloads from services like the iTunes Store, Napster, Rhapsody, and others. WABC-TV reports that in addition to digital downloads, data processing and shipping and handling charges are subject to sales tax as well.
While charging sales tax for services like shipping and handling may seem a bit excessive, adding tax to music and video downloads is not unheard of. In Colorado, for example, where Apple has several retail stores, a US$0.99 iTunes purchase will cost you about $1.06.
Presumably, Apple will collect the New Jersey tax just as it does in other states. When you create an iTunes account, Apple collects information about the city, county and state you live in, and then adds the correct sales tax to purchases you make through the iTunes Store.
Music and video downloaders don't need to feel singled out. New Jersey also added flooring and carpet installation, storage spaces, tanning, massage, tattooing, limousine services, parking garages and lots, and more to the list of taxable items.
Thanks to Ars Technica for the heads up.
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