Are “Unauthorized Downloads” Taxable?
June 4, 2009 by Rico Mossesgeld
Filed under Trends
Seems some states in the US are planning to apply taxes on digital downloads. According to Techdirt, this kind of tax is scheduled to apply this July 26 in Washington state. More important however is a potential legal ramification. To quote:
What is the value of the digital product for use tax purposes?
The value is the purchase price of the digital product. If the digital product is acquired by means other than a purchase, the value of the digital product is determined by the retail selling price of a similar digital product. [emphasis mine]
So, does this mean the state government can apply a tax to people who acquire a “digital product” (like music, video, or a game for instance) “acquired by means other than a purchase” (like through a pirated torrent)? Authorities definitely need to clarify.
Screenshot of Steam Checkout Page
More importantly, will the tax lead to higher prices, as sellers have to raise prices to honor the law and continue making money? If so, then won’t the tax lessen the incentive for “unauthorized” downloaders to become paying buyers?
More info on ESHB 2075 (AKA the Digital Products Bill) is available here.
