House Judiciary Approves Digital Fairness Tax Bill

Would prevent multiple and discriminatory taxes of digital goods and services

By John Eggerton -- Broadcasting & Cable, 6/28/2012 2:15:54 PM

The House Judiciary Committee approved a bill on Thursday that would eliminate multiple and/or discriminatory taxes on digital goods and services.

The bill, the Digital Goods and Services Tax Fairness Act of 2011, would limit taxes on digital goods -- music, movies and ebooks among them -- to either the buyer or seller, and only in the state or jurisdiction of either's tax address.

"This bill prohibits states from imposing a higher tax on digital goods and services than they impose on tangible goods and services," said Committee Chairman and bill backer Lamar Smith (R-Texas). "It also provides a uniform framework to determine where a transaction that involves digital goods takes place."

"Today's markup of the Digital Goods and Services Fairness Act shows that the House Judiciary Committee understands the importance of this legislation for the protection of consumers, businesses and the competitiveness of the United States in the global market," said the Download Fairness Coalition, whose members include the National Cable & Telecommunications Association, as well as Comcast, Cox and Time Warner Cable.

"The national framework created by this Act will provide much-needed parameters to states seeking to tax digital purchases by clearly identifying which jurisdiction has the right to implement the tax, and will clear the way for businesses to innovate thereby generating more products, more jobs, and more economic growth," said the coalition. "We urge House leadership to bring the Digital Goods and Tax Fairness Act to the floor as soon as possible."

"Today, the House Judiciary Committee took an important step to bring some clarity and consistency to the digital marketplace," said CTIA: The Wireless Association.