State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.
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Expert: digital download tax is "common sense"

Written by Katie Meyer, Capitol Bureau Chief | Jul 14, 2016 9:16 PM

The digital downloads tax will apply to products like online books, music downloads, and streaming services. (Photo by AP)

One of the more unexpected clauses in the state's new revenue bill is a sales tax levied on digital downloads.

Until the new budget passed, such goods were tax-exempt.

But once the provision goes into effect, products like apps, books, music, and streaming services will be subject to the same 6 percent state tax as physical goods.

According to Michael Mazerov, a senior fellow at the nonpartisan Center on Budget and Policy Priorities, expanding the sales tax was just logical.

"Think about all the people this week who are playing Pokemon GO--as consumption shifts, and if the sales tax base isn't adapted, the revenue generated from the sales tax will not keep up with the services the sales tax is paying for," Mazerov said.

Mazerov said in his mind, it makes little sense to exempt certain products from taxes simply based on the medium through which they are delivered.

"It's just a fundamental fairness issue that justifies this," he said. "There's no justification for not taxing something when you buy it as a digital download when it would be taxable if you bought it in a physical form in a store."

Mazerov has studied digital taxes around the country.

He said roughly half of states have a similar levy.

The commonwealth budget estimates digital downloads will bring in nearly 46-point-nine million dollars in a year, out of a total revenue package of one-point-three billion.

Published in State House Sound Bites

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