California Plan would Tax Downloads

LISTEN UP! PLAN WOULD TAX DOWNLOADS
A Californian state lawmaker is proposing taxing a sales tax for digital music downloads to help close the state's $8 billion budget shortfall. The proposal by State Assemblyman Charles Calderon (D-City of Industry) doesn't seek directly to tax music tracks, but instead would require the Board of Equalization to update a 75-year-old law that authorizes sales-tax collections on tangible personal property. Music, books and videos downloaded off the Internet aren't considered tangible goods. "The notion of taxing tangible, physical property is really an industrial-era construct when we made widgets and sold widgets," Calderon said. "Now it's not about widgets, it's about information, and selling information and moving information." If Calderon prevails, the 8.25 to 8.75 percent sales-tax rates in effect in most of the Bay Area would raise the cost of that 99-cent download to $1.07 or $1.08. But his measure is being soundly criticized by Republicans, who are opposed to any tax increases to solve the deficit problem.
http://www.mercurynews.com/ci_8837145