FCC Suggests Federal Approach To Taxing Online Digital Goods, Services

As part of the National Broadband Plan, the Federal Communications Commission wants the federal government to look into establishing a "national framework" for taxing digital goods and services.

According to the FCC, one of the impediments to increasing the benefits of broadband, and in particular e-commerce, is the "current patchwork" of state and local laws and regulations on taxes of services like ringtones and digital music. It says that patchwork quilt of requirements is of little comfort to entrepreneurs, who may lack the resources to "understand and comply" with the various tax regimes. "Recognizing that state and local governments pursue varying approaches to raising tax revenues, a national framework for digital goods and services taxation would reduce uncertainty and remove one barrier to online entrepreneurship and investment."