Ending the Double Tax on Digital Goods

By August 2, 2013General

Today, manufacturers and consumers alike are hurt by discriminatory and duplicative taxes on digital goods and services, which can range from downloads of music files and apps to cloud computing services. Often times, multiple states are taxing the very same electronic transaction simply because tax rules have not kept pace with the growth of the digital marketplace.

That could all change under new legislation introduced by Senators Ron Wyden (D-OR) and John Thune (R-SD). The Digital Goods and Services Fairness Act (S. 1364) would prevent different jurisdictions from imposing multiple taxes on the same digital transaction as it bounces from one area of cyberspace to another, ensuring that only the final customer is taxed when receiving the service.

Without this fix, a manufacturer of a digital good in one state could be taxed on the same product as a consumer receiving the product in another state. The bill would also end discriminatory taxation of digital goods and services, such as an electronic manual, when a tax does not currently apply to the tangible good, or hard copy of that product.

It costs 20 percent more to manufacture here in the U.S. than it is does for our competitors, and a large chunk of this expense comes from the tax burden plaguing American manufacturers. Commonsense proposals that reduce this tax burden — like the Wyden-Thune bill — go a long way in helping American manufacturers thrive, innovate, and compete in the modern 21st century global economy.

Christina Crooks

Christina Crooks is Director, Tax Policy for the National Association of Manufacturers, where she is responsible for providing NAM members with important updates on tax policy, pensions, and corporate finance and management issues and representing the NAM’s position on these issues before Congress and the Administration. Within the NAM tax policy portfolio, Christina focuses on the R&D tax credit and tax extenders, and serves as the Executive Secretary for the R&D Credit Coalition and a leader in the Broad Tax Extenders Coalition.

Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.

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