Wisconsin governor seeks voluntary tax on downloads
By Barb Dybwad 
posted March 10th 2005 1:25PM
posted March 10th 2005 1:25PM
"Voluntary tax" is pretty much an oxymoron if we've ever heard one, but that's not stopping Wisconsin's Democratic governor Jim Doyle from proposing just such an absurdity. He thinks Wisconsin's 5% state sales tax shouldn't be reserved just for actual, tangible items, but ought to apply to internet downloads as well (including music, ebooks, photographs and other "finished artwork") — and that Wisconsin residents will pay the tax. Voluntarily. After the laughter subsided, we felt it our duty to inform Jim that this may not be the very best way to encourage electronic commerce. Good luck with that, though, and maybe you'll be able to snag two or three $1.04 tracks from the iTunes Music Store with the proceeds.
Wisconsin residents elect the dumbest govenors
First Thompson, then Doyle...
He's just another greedy politician taking advantage of a person's natural compulsive generosity.
Just goes to show how screwed up of a state Wisconsin really is.
Uh, Wisconsin's probably one of the only states that *doesn't* have such a thing already, if that's really the case. It's called a use tax.
In fact, in my state (New York) and many others, downloads are taxed already under sales tax laws. Whether you provide a service or a tangible good doesn't matter - it's still a sale, and it's covered under state sales tax.
This does not apply if you buy something from out of state, including downloads. But what *does* apply then is the use tax. Most states have this, yet a lot of people don't know about it. New York just started getting serious about letting people know about it a couple years ago, with a big publicity campaign and a change to the tax form that now specifically asks you if you engaged in any interstate commerce and if so, how much.
You are legally required to declare any item you bought out of state, including services (which would include downloads), and then used in New York (or wherever you live, if you live in a state with a use tax). You then pay tax on them generally equal to the sales tax, although there may be a maximum cap.
Does anybody actually do this? I don't know, but you're supposed to. When New York went on its publicity campaign they did specifically say they weren't going to be auditing anybody for it, so it sounds similar to what Wisconsin's saying. It's sort of been done on the honor system to this point; it's not like they can really effectively check if you've bought anything out of state and then used it in-state.
But the law is there, in something like 35-36 states - you're supposed to pay tax on any good or service bought out of state and used in state.
whoa whoa whoa Pedro!
A. No need to be like that.
B. To be honest, this isn't really that bad. Truth be told, if you think that you should be taxed for things that are material, why shouldn't you be taxed for things that are immaterial? I can't think of a good reason. I don't want to pay, but I can't think of a legal reason not to.
That all said, Wisconsin is really not a bad place - at least not in the metro areas. Like any state, go into the boonies and that's exactly what you get. Like any state, we've got our crazies, but don't tell me that a 5% voluntary sales tax is worse than:
- a law explicity stating that you can't take a lion to the movies (Maryland)
- a license required to hang clothes from a clothes line (NY)
- illegal oral sex, married or otherwise (OK)
- the right to shoot Native Americans if more than 5 are congregated on your property
- a required license to wear a goatee (Mass)
- it is illegal to keep more than 11 non-working cars in front of your house (RI)
Anyway, there are tons of stupid laws. While this one is dumb, it is relatively innocent, and not a great indication of one state's intelligence or fitness.
are they going to tax us on the air we breath too!
I just have to say that I live in the state but the people are getting crazier by the minute.
Michigan states on the last page of their tax form that you are required to declare all out of state purchases that were not taxed by the state of origin and pay MI sales tax on them...
and for the 3 ppl that do that everyone else just asks why?
Asher, did you hear about the guy (or guys) in Michigan that got a back tax bill for $2,000k+ on some cigs he bought online. Suck.
so they are starting to track online purchases in MI now... not fun.
I do not see why all taxes are reworked into a flat sales tax. No more FICA or SS or anything. Just one flat sales tax on all goods sold. Then everyone, including visitors pay into the infrastructure. No tax evasion or loop holes, no shelters for the rich and you've paid in proportion to what you can afford to purchase. Less paperwork and less gov't employees!!!! Seems rather easy really.
But as of right now, I'm going to hide.
Dear # 4,
Bobblehead Jim is only proposing this tax because he promised us he would balance the budget without raising taxes. He hasn't lived up to any of his words - of course, that normally goes with the "governor" title. At any rate, it's far from 'innocent.' Once it's in place there's no telling how long before they turn it into a mandatory tax. And as soon as we're doing it in WI, you know other governors will propose similar taxes in their states.
http://www.bobbleheadjim.com/
What if the Wisconsin resident orders something online while he/she is in another state? Who gets the tax then. Someone needs to make some decisions. If every state taxes internet commerce a different way, things could get very confusing, not to mention if you are unlucky, you might have to pay multiple taxes. For example. Say I live in NY, work in NJ, and I go to PA on vacation where I order an iPod on a website hosted on a server in Texas, from a company that was encorporated in Delaware and has their offices are in Colorado. It ships from a warehouse in Virginia to my friend's house in Ohio where I'm going to pick it up. What state gets the tax?
#10 - what is a link to a republican site bashing a democratic governor supposed to mean to anyone? Um, duh, they don't like the guy. Think people couldn't have come up with something for Scotty or the all-beloved Tommy T if either was still governor?
And, as the poster above states, it does boil down to nothing more than a use tax. political? yes. slick? sure. conspiratory?
Anyway, this is a site for technology so i'm done on the politics, but, that was just a dumb thing to post.
I am a Wisconsin resident, and I just want to point out some objective points about this issue. First, Wisconsin already collects taxes on intangible things, such as shipping charges and certain service charges (movie tickets and video rentals, for example). Additionally, Wisconsin already asks residents to report their mail-order and online purchases and to voluntarily pay the tax on them on their state income tax returns. It is difficult to enforce, but some of us are honest (at least I am). Third, the State collects sales taxes on essentially the same product when we purchase CD's or DVD's; the only differences are the medium (removable optical media vs. hard disk) and the method of delivery (in-person vs. electronic download). Finally, the intent (note that I say intent) of collecting more sales tax is to reduce personal income and property taxes. The State already ranks high in the nation for collecting revenue from taxes and fees, yet it has a structural deficit in place. The structural deficit results from the size of Wisconsin’s state government.
Instead of raising taxes, Wisconsin’s Democratic Governor reports that he wants to hold the line on them and also try to provide property tax relief to the residents by reducing the State’s bureaucracy (that is, he has vowed to reduce the number of state employees). The result of the Governor’s budget will result in a long-term savings for homeowners; his opponents (the Republican-controlled Wisconsin Legislature) offered tax relief as well, but the results will be short-term, and residents’ taxes will increase after a couple of years. This information comes from the Wisconsin Legislature’s non-partisan Legislative Fiscal Bureau service agency. I hope this is objective enough. For more evidence, here is a link to the summary of the report I just mentioned: http://www.legis.state.wi.us/lfb/Misc/021805WILeg.pdf.
Everyone is entitled to their opinions, but they should be based on analysis. A friend often reminds me that it is better to remain quiet and let others think you’re unintelligent than to open your mouth and remove all doubt. Personally, I buy things online if I can’t find them locally, so I intend to pay the sales tax either way.