California beware, iTunes tax law threat returns

Jonny Evans
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July 09, 2008
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 Wake-up, California - your iTunes prices are under attack (again).

That's right - assemblyman Charles Calderon is back with another attempt to levy a tax on digital downloads, just two months after Californian voter anger saw his last attempt to do the same thing chucked out with a vengeance. In April, the Assembly Revenue and Taxation Committee on a bipartisan vote rejected a legislative proposal to extend California's sales and use tax to digital property.

So what's this guy pushing for this time (other than more money for the government)? Turns out to be the same again, only this time split into two parts, presumably on the basis that if one set of rules is approved, it will set some kind of precedent to more easily force through this tax. (Not that we're lawyers, not that we're Californians, even, but we do know that's how bureaucrats like to force through that awful system creep).

"Sales of Digital Property. AB 22XXX (Calderon), introduced June 25, requires the State Board of Equalization to report to the Legislature on the sales of digital property. The report must include a proposed regulation to tax such property, and a revenue estimate. This bill is keyed a majority-vote bill.

"Tax on Sales of Digital Property. AB 23XXX (Calderon) introduced June 25, imposes the sales tax on digital property. The bill is keyed a two-thirds vote bill.

The legislation is intended to extend the sales and use tax to downloads of online music, movies, ring tones, games, books and other digital property."

So far as we can tell, it's time to dust off your letter-writing skills once again to see Calderon's dual-pronged second attempt rejected. The last attempt was rejected after a campaign by Cal-Tax, over 130 Californian companies and others.

Thanks to the CalTax letter for the detail.

Comments (6)

MadMike | July 09, 2008 - 10:36am

This Calderon guy has been a screwball democrat for 26 years. He tryes to pit himself as a conservative democrat, but he is no Zell Miller. Eventually people will vote him out and he'll go back to the rock he climed out from.

Go back under your bridge troll, your powers don't work here.

"Now, I don't want to get off on a rant here, but..." - Dennis Miller

Jon (not verified) | July 09, 2008 - 11:13am

I get that tax revenues are falling because of online cross border shopping, but why don't states just raise their state income/property taxes to compensate instead of adding new bureaucracy and paper work.

Everyone keeps talking about simplifying the tax code and yet there are proposals like this being floated around that would further complicate it.

9to5Mac Noob (not verified) | July 10, 2008 - 7:35am

One, let the free market rule, and instead of taking more money from the people through a tax that will never be repealed, why don't they cut spending? It's not like I can go to my employer and ask for more money every time my expenses increase. It's time for the government to act responsibly and cut spending.

9to5Mac Noob (not verified) | July 09, 2008 - 3:01pm

Revenues really haven't been falling. Until the recent economy slide, a home sale usually meant a reappraisal under Prop 13 and the state government made out like a bandit. Add to that that when you purchase a new car in California, you can add roughly 10% (2% vehicle tax and 7.5-8% sales tax)...again, the state's been reaping a windfall for years now, but just as the economy began to slow, we're told for the second time in 6 years we're in the red tens of billions of dollars. Spending wise, they can't help themselves. They're compulsive spenders. It doesn't matter how much they get....they'll always spend 120% of revenues coming in from no matter where...they're politicians...what good are they without other people's money?

droughtquake (not verified) | July 09, 2008 - 11:02pm

The California budget is in trouble because health care costs continue to rise, and the prison population is increasing (retribution rather than rehabilitation).

Republicans keep trying to cut necessary services while refusing to reinstate tax rates that were cut when the economy was flying high. Politicians of all stripes are afraid to close tax loopholes or raise taxes.

In the meantime, funding for education rivals Mississippi (per student funding), quite a fall from being in the top 10% with a world-class education system.

Khurt (not verified) | July 17, 2008 - 1:15pm

Each time I purchase from the iTunes store a tax is collected. The revenue that Apple reports from the iTunes store is taxed. So what taxes is he looking to collect that aren't already collected?