Policy Documents

Digital Downloads Should Be Protected from Discriminatory and Duplicate Taxes

Seth L. Cooper –
June 6, 2012

Explosive growth in the purchase and delivery of digital goods and services through the Internet cloud is a sure source of economic vitality and optimism for our nation. With the deployment of next-generation broadband and wireless broadband networks, businesses and consumers increasingly are taking to digitally-downloadable products.

As the economy grows progressively more digital it becomes all the more important that federal and state tax policies align with the new realities of Internet e-commerce. The market for digital goods and services must be allowed to advance without being stifled by uncertain tax laws or subjected to multiplying tax burdens.

Legislation now pending in Congress would create a sensible framework for state taxation of interstate sales of digital goods and services. And it would do so without itself imposing any new taxes or mandating tax or no-tax decisions by individual states.