Posted on 04/21/2010 1:47:48 PM PDT by a fool in paradise
Even a trip to iTunes for a new song or movie might soon be within the grasp of Illinois’ tax collectors.
Imposing the state’s sales tax on downloaded songs and movies surfaced as a new money-making idea Tuesday from Gov. Quinn’s administration to help bail out the state, which has a $13 billion deficit.
Quinn also proposed selling off a portion of tobacco settlement proceeds to raise $1 billion; requiring banks to divulge the accounts of tax scofflaws to arm the state with a potent new tool to collect unpaid taxes, and extending for four months deeper into the next fiscal year the timeline for the state to pay leftover bills from this year.
But the proposed digital download tax, while not immediately a huge revenue generator for the state, could have the broadest reach considering how many people walk around with iPods or iPhones.
Now, digital downloads are not taxed by state government, depriving Springfield of up to $10 million in revenues annually. But that figure could grow over time as more people download entertainment from Internet sites such as iTunes and Amazon.
“We think that’s an area where we’ve not kept up with technological change,” said David Vaught, director of Quinn’s Office of Management and Budget.
There was a time when shoppers paid the state sales tax when they bought record albums, compact discs or cassette tapes from stores, but that taxation never migrated to the Internet, Vaught said.
Under Quinn’s proposed download levy, the state would get 50 cents on the sale of a $9.99 album and 75 cents on the sale of a $14.99 movie.
But that wouldn’t happen without a fight from Republicans, who criticized the plan.
“It will be an interesting education for younger voters about the reach of the state’s treasury into their pockets,” said Sen. Matt Murphy (R-Palatine). “I don’t suspect it’ll be well-received at all.”
A leading technology trade group also sounded off against the download tax, saying it would fuel music and video piracy and drive tech companies out of the state.
“We believe the last thing the state of Illinois wants are unintended consequences for an industry that drives growth, innovation, and leads in new job creation for our country and economy,” said Ed Longanecker, executive director of TechAmerica Midwest.
Since 2007, 19 states have imposed similar download taxes, including Indiana, Wisconsin, Kentucky, Mississippi, Nebraska, New Jersey, South Dakota, Tennessee, Utah and Washington, according to the National Conference of State Legislatures.
The proposal was included in $391 million worth of tax law changes mainly affecting businesses that Quinn presented to the four legislative leaders at a closed-door budget meeting Tuesday.
Earlier in the week, Quinn had considered pushing a 5-cent tax on plastic grocery bags, which could have raised $100 million, and enacting a 5-cent per bottle tax on bottled drinks, which could have generated as much as $80 million.
But Vaught said the administration has backed off of those hot-button proposals, which he said were included in a “draft” his office had circulated earlier among legislative staffs.
Quinn remains committed to a 1 percent increase in the state income tax for education, though prospects of passing the tax increase seem dim at best.
Last week, a key legislative source estimated that the $2.8 billion tax increase had only about 45 votes in the House, where 60 votes are needed.
House Republicans oppose Quinn’s income-tax plan, raising the possibility that House Speaker Michael Madigan (D-Chicago) would give the governor a vote on his tax but then pass a partially funded state budget once the income-tax plan failed.
That would get lawmakers out of Springfield by early May, which increasingly is regarded as an earlier-than-usual legislative adjournment target.
An army of union-backed protesters is expected to converge on the state Capitol today to push for the Quinn income-tax increase.
Music PING
I’ve got an idea!
LET’S TAX POLITICAL CONTRIBUTIONS!.................
What is the tax on graft anyhow?
And *no*...I don't report purchases made out of state as required on the Massachusetts Income Tax return.That would be stupid! ;-)
And this is just to pay for PAST shortfalls. House of cards.
Music Ping? Shouldn’t that be an “Apple may decide to no longer sell to Illinois residents ping”?
That is after all, what we have seen happen in other areas of e-commerce.
Sure, go ahead and make piracy even more attractive. Idiots!
ML/NJ
So far, no tax on limewire.
The Brits were so on-target...the Beatles, Monty Python...the UK was starting to reach these levels of taxation thirty years ago.
>>A leading technology trade group also sounded off against the download tax, saying it would fuel music and video piracy and drive tech companies out of the state. <<
HAHAHA! like I said in an earlier post, there is no tax with Limewire.
Y’know, this whole thing is reminding me of the collapse of the Soviet Union. Technology that allowed people to get information not filtered by the state was their ultimate demise. In the US, technology eliminates the state’s ability to effectively tax on much of the transfer of “virtual” goods.
Gubmint (and Hollywood) want an internet tax based on bandwidth used downloading.
>>Gubmint (and Hollywood) want an internet tax based on bandwidth used downloading.<<
This is “extra funny” because when I moved to my current residence, I found out I could leach off the hospital next door and get two bars of service. What was interesting was that I was “forced” into safe search with Google search due to their controls, but I was able to use Limewire, which they cannot control.
I ended up getting a comcast account after a couple of months anyway, but I am seriously considering cancelling comcast and going back to the “free” service. BTW, it is free. They have me sign a disclaimer when I first chime in and then I’m good to go. Since I don’t surf porn, it’s not a big deal.
I am a lite iTunes user. Wisconsin started this non sense a few months ago so I make other arrangements for my music
Thanks for the ping!
Sorry, but it’s stupid to NOT tax one distribution system while taxing another. Thanks justiceseeker93.
Even a trip to iTunes for a new song or movie might soon be within the grasp of Illinois' tax collectors.
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