Over the past several years, consumers have been downloading digital products such as mobile phone applications, music, e-books and digital videos at an increasingly rapid pace.
New technologies are changing the way Utahns shop for products every day. To the benefit of consumers across the state, the proliferation of broadband Internet and mobile services has made finding the best deals even easier for shoppers. It has also created a marketplace for a whole new range of products — and new sources for elected officials seeking more tax revenue.
In fact, the Utah Legislature already passed a bill to tax these products and services in the same way as items offered through more traditional means like physical retail outlets. If a Utah consumer buys a book at a local shop, the purchase includes the state's sales tax. If the same consumer buys an electronic copy of the same book for an e-reader, he or she is supposed to be assessed the same charge, and no more. Unfortunately, the current taxation of digital goods and services is problematic.
When consumers in Utah click "download," they usually pay Utah sales tax on the purchase. But unbeknownst to them, consumers may also owe a tax to a state where they don't live and a place where they've never been.
One reason this occurs is because states have different definitions of their taxing powers that often intersect. But much of the confusion results from the fact that there is currently no national framework delineating which state can tax which purchase and it can leave consumers paying two or even three times for one download.
Utah citizens already pay taxes for the digital goods and services they use every day. Letting other states reach further into their pockets from outside our borders not only hurts their finances, but also damages the marketplace for these new products. Deseret News
