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Bipartisan Internet Tax Fairness Bill Introduced

Senate Finance Committee members John Thune
(R-S.D.) and Ron Wyden (D-Ore.) have introduced a bill to prevent multiple
taxation of digital goods and services on the Web, including downloads of TV
shows, movies and apps as online purchases become more mobile along with the
tablet-toting, iPhone accessing folks who make them.

The bill's sponsors
say it would prevent duplicative and discriminatory taxation that could stifle
innovation and the online economy.

The Digital Goods
and Services Tax Fairness Act of 2013 (This legislation would also preclude
discriminatory taxes from being imposed on digital goods and services solely
because they are transmitted over communication networks) prohibits state and
local governments from applying taxes to online products sold over
communications networks that don't apply to similar tangible goods.

The bill also
prevents the imposition of multiple taxes as digital goods and services move
from one jurisdiction to another by making only making the final customer or
end user pay the tax. For example, a summary of the bill says, "if a
consumer is on vacation in another state and downloads a song, the state the
consumer is visiting, the state that houses the server providing the song, and
the consumer's home state could, under the right circumstances, all claim the
authority to tax the purchase."

The Download
Fairness Coalition, whose members include cable operators whose business
depends on all that broadband traffic, was pleased with the bill.

"Establishing a
national framework guiding how state and local taxes can be imposed rationally
and fairly on the digital economy, will help ensure consumers are never subject
to the nightmare scenario where someone downloading a single app or song could
have two or three different taxing jurisdictions all claiming the right to tax
the same download," said the coalition. "The measure will also provide
much needed certainty that will allow the app economy to continue to thrive,
which today supports more than half a million jobs and generates billions of
dollars for small businesses and entrepreneurs all helping to support our
national economy.

Coalition members
include Time Warner Cable, Comcast, Cox and the National Cable &
Telecommunications Association.