NORWALK, Conn. – The taxation of digital goods was among the many topics tackled at a meeting last weekend of a National Conference of State Legislature task force, said state Rep. Chris Perone of Norwalk.
“Taxes continue to be a hot-button issue in our state,” said Perone, who was led the meeting as co-chair of the Executive Committee Task Force on State and Local Taxation.
Perone, who also heads the conference’s Commerce Committee, said the task force strives to provide guidance on tax issues to state legislators.
The taxation of digital goods and services happens to be one of the biggest hot buttons at this time of state budget gaps in Connecticut.
Digital goods are software programs, music, videos or other electronic files that users download from the Internet. Some are free, but others have fees attached.
Digital goods and services are increasingly part of everyday life. The taxation of such is partially governed by federal statute and has been the focus of significant state legislative and rule-making activity.
States searching for ways to increase revenue, financial experts say, are looking more closely at taxing digital goods and services.
According to a report in thetaxadviser.com, the facts make it plain that the area is a good hunting ground.
In 2012, nearly 500 million ebooks were sold, thetaxadviser said. In 2013, the music industry reported that digital album sales accounted for 43 percent of all album sales. The same year, Netflix generated more than $2.7 billion from its domestic streaming segment, it reported.
Also to be discussed at the meeting are new standards requiring the disclosure of government tax incentives, the effects of state taxation on international investment, and property taxation of communications infrastructure.
Perone said he was happy to take advantage of the “chance to learn from other state legislators and tax experts and (to) bring that knowledge back to the Connecticut General Assembly, and more specifically the Commerce Committee, in hopes of improving our tax system.”
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