Bipartisan Internet Tax Fairness Bill Introduced

Senate Finance Committee members John Thune (R-SD) and Ron Wyden (D-OR) have introduced a bill to prevent multiple taxation of digital goods and services on the Internet, including downloads of TV shows, movies and apps as online purchases become more mobile along with the tablet-toting, iPhone accessing folks who make them.

The bill's sponsors say it would prevent duplicative and discriminatory taxation that could stifle innovation and the online economy. The Digital Goods and Services Tax Fairness Act of 2013 prohibits state and local governments from applying taxes to online products sold over communications networks that don't apply to similar tangible goods. The bill also prevents the imposition of multiple taxes as digital goods and services move from one jurisdiction to another by making only making the final customer or end user pay the tax. For example, a summary of the bill says, "if a consumer is on vacation in another state and downloads a song, the state the consumer is visiting, the state that houses the server providing the song, and the consumer's home state could, under the right circumstances, all claim the authority to tax the purchase."