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Tennessee Considers "iPod Tax"

Friday, April 25th, 2008 at 12:50 PM - by

Tennessee is considering supplementing its revenue shortfall with a tax on digital downloads. The state's Digital Products/iPOD Tax, which is part of the "Technical Corrections" bill, is still in preliminary stages and plans to include nearly any type of digital media download.

According to an analysis by attorneys at the Nashville-based Waller Lansden Dortch & Davis law firm, the bill "would subject downloaded sales of digital media, including music videos, motion pictures, news and entertainment programs, music, ringtones, electronic books, etc. to the retail sales tax."

At least for now, it appears that software downloads are safe from the proposed tax.

The proposed legislation hasn't been presented to Tennessee lawmakers yet, but that's not stopping some from critisizing the move.

"Most states do not tax digitally-deliverd products," said state communications director Bill Hobbs. "Tennessee shouldn't either and state government's current fiscal crisis should not be used by the Bredesen administration as an excuse to hit the people of Tennessee with a new tax that could cost them tens or even hundreds of millions of dollars."

Apparently the state is facing a US$500 million budget deficit and is looking every place it can for additional revenue, according to WDEF News 12. Should the digital download tax find its way into law, it likely won't site well with the state's consumers or the companies that provide the content facing taxation.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Fri Apr 25, 2008 1:58 pm

Good luck to the great state of Tennessee collecting their tax! Since I have no nexus there, I sure as hell won't be reporting sales or collecting taxes for them. Losers.

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A guest said: (hide)

Fri Apr 25, 2008 2:20 pm

When I get to vote in Tennessee, they can collect taxes from me. Until then, it is "taxation without representation". In addition, the Federal Mail Order law specifically denies states the right to collect taxes on interstate commerce. The only exception is when the provider has a physical presence in the state, and therefore, is no longer interstate commerce. Whenever a state law is in conflict with a Federal law, the Federal law trump it.

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jbruni said:

member since 14 Jul 2006 with 105 posts, unranked, send him a message or view his profile

Fri Apr 25, 2008 4:10 pm

won't site well?

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A guest said: (hide)

Fri Apr 25, 2008 4:18 pm

An iPod tax, eh? This is the kind of bold, innovative thinking that got Tennessee $500 million in debt to begin with. The governor will probably veto it, but should be amusing to watch the antics of the techno-ignorant who support this bill as they try to convince people they know what they're doing

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A guest said: (hide)

Fri Apr 25, 2008 7:14 pm

A guest said: "taxation without representation"

I don't see anything that implies non-residents of Tennessee would have to pay the tax (unless the purchase is made in Tennessee).

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A guest said: (hide)

Fri Apr 25, 2008 11:34 pm

Our state did it with a cigarette tax that raised the price to just under $6 a pack. The money was earmarked for the general fund. Then 6 months later they passed a law forbidding smoking in bars and other public areas. The thing is, 35 percent quit smoking. Even more buy them illegally and several bars and casinos have closed due to lack of smokers. Now they're a huge shortfall on the proposed tax and are reviewing credit card purchases and cars entering the state to get their tax. Gotta love a police state.

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A guest said: (hide)

Fri Apr 25, 2008 11:41 pm

"Our state did it with a cigarette tax"

I live in Iowa, we did a similar thing with similar results, although you can still smoke in casinos due to the taxes that they pay. Makes you wonder just where the money is going. Maybe we could cut our spending instead of taxing the poor. As long as they target the rights of the few they'll keep taxing them. The rich and the educated won't care, afterall it's taxing things that they don't do.

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Sun Apr 27, 2008 10:40 am

Yeah they need to tax it by the acre-foot of data that goes through them Internet Pipes.

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Intruder said:

member since 07 Jul 2004 with 3149 posts, TMO Mac Specialist, send him a message or view his profile

Sun Apr 27, 2008 11:03 am

Anonymous wrote:
"Our state did it with a cigarette tax"

I live in Iowa, we did a similar thing with similar results, although you can still smoke in casinos due to the taxes that they pay. Makes you wonder just where the money is going. Maybe we could cut our spending instead of taxing the poor. As long as they target the rights of the few they'll keep taxing them. The rich and the educated won't care, afterall it's taxing things that they don't do.

'cause I've never seen a rich or educated person smoke or gamble...

Didn't know that smoking was a "right", either.

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tthomcarl said:

member since 24 Mar 2006 with 5 posts, unranked, send him a message or view his profile

Sun Apr 27, 2008 4:51 pm

Several years ago TN attempted something similar to this, since I have relatives in TN I had intended to retire their, it's a beautiful state. Upon learning of TN intention to tax internet use, I sent the Governors office an email to let them know that I had changed my plans and TN was off of my list because of their attempt to tax the internet. I got 5 pages of pure political drivel about a week later asking me to reconsider my choice of retirement location, my reply was a politically incorrect rant as to the lack of integrity in government.

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tytrumpet said:

member since 28 Apr 2008 with 1 posts, unranked, send him a message or view his profile

Mon Apr 28, 2008 7:47 am

Gee, A lot of good Al Gore is (former Senator from TN) on that board if that passes. Maybe he can really do something for apple (and others) now and have that legislation zapped.

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A guest said: (hide)

Mon Apr 28, 2008 10:41 am

The "$500 million budget deficit " is a crock. The Bredesen administration "wants" an additional $500 mil over last years budget. Why would Tennessee NEED a ballroom(bunker) in the Governor's Mansion?? Check NY Times article "Plans for Annex to Governor’s Mansion Draw Critics".

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