CBO Scores Digital Goods and Services Tax Fairness Act

The CBO scored the Digital Goods and Services Tax Fairness Act of 2015 (HR 1643), which would prohibit state and local governments from imposing taxes on the sale of some digital goods and services that are taxable under current law. CBO estimates that enacting HR 1643 would have no direct impact on the federal budget. Enacting HR 1643 would not affect direct spending or revenues; therefore pay-as-you-go procedures do not apply.

Enacting the bill also would not increase net direct spending or on-budget deficits in any of the four 10-year periods beginning in 2026. The prohibition on the ability of state and local governments to tax the sale of some digital goods and services would be an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the cost of complying with that mandate would far exceed the threshold established in UMRA for intergovernmental mandates ($77 million in 2015, adjusted annually for inflation). HR 1643 also would impose a private-sector mandate, as defined in UMRA, on sellers of digital goods and services by requiring them to maintain tax information on their customers. CBO estimates that the incremental cost to comply with the mandate would fall below the annual threshold for private-sector mandates established in UMRA ($154 million in 2015, adjusted annually for inflation).