Online Tax Bill Could Bring NAB, RIAA Together
April 15, 2008 at 12:12 PM (PT)
A vote in the CALIFORNIA legislature YESTERDAY (4/14) prevented the RIAA and NAB from becoming unlikely partners ... at least not yet. A bill that would impose a tax on online business -- including everything from music downloads to the sale of website advertising -- was narrowly defeated late MONDAY by the state assembly's Revenue and Taxation Committee, reports the SAN JOSE MERCURY NEWS. However, Democratic Assemblyman CHARLES CALDERON, who sponsored the bill, expects to recall the bill for a "reconsideration" vote as soon as next week.
According to CNETNEWS.COM, the bill calls for all "digital property" to be taxed, which "includes, but is not limited to, products like music, movies, and books." This could also pertain to website advertising, eBay transactions, online ticket sales of concerts, movies and events, and online stock brokerages and tax return services. Thus, should this be up ever get to a full CALIFORNIA Assembly vote, let alone to Gov. ARNOLD SCHWARZENEGGER's desk, the NAB and RIAA -- who have been at each other's throats over issues such radio performance royalties -- would have to work together to help prevent this from becoming law.
While CALIFORNIA would be the biggest and most influential state to adopt such a tax, it certainly isn't the first. According to CNET, 20 states and the DISTRICT OF COLUMBIA already have the ability to tax digital downloads (17 of them actually do tax digital downloads), while WISCONSIN and MASSACHUSETTS are among the states that have formed groups to "study new iTUNES taxes."
Supporters of such proposals contend that the online surcharge makes up for the loss of tax revenues coming from what would have been "physical" versions of the transactions. Detractors of such legislation cite an obvious drawback -- increased digital piracy. In a op-ed piece in the SACRAMENTO BEE, Republican MICHELLE STEEL wrote that "new taxes encourage consumers to return to their nasty habit of illegally downloading music."
Making matters infinitely more complicated is in assigning responsibility for collecting such taxes. Read the entire story here.