xbiz world
xbiz premiere

States Look Into Taxing All Media Downloads

WASHINGTON – With the rapid growth of online shopping, many state legislatures and tax officials are looking into the legality of taxing downloadable digital media. The proposed tax would cover the lucrative markets of music, movies and e-book downloads. “More states are beginning to tax downloaded products,” Steve Krantz of the Council on State Taxation told CNET News. “Some are doing it through specific legislation. Others are doing it through the interpretation of previous law.” With digital music sales alone accounting for more than $1.1 billion in revenue worldwide, taxable media downloads would bolster government spending and could act as a safety net for overextended state budgets. The U.S.-based recording industry accounts for $503 million of that figure, which doesn’t include movies, video games and other digital media. The burgeoning use of broadband Internet connections, coupled with the runaway success of music download service iTunes and its competitors, makes downloadable content fertile ground for states that don’t impose such tariffs already. New Jersey Gov. John Corzine proposed that music and video downloads would be subject to tax in his new state budget, with legislation to follow in June. Kentucky also is looking into fine-tuning state ledgers to include download taxes. House Republicans defeated a measure from Wisconsin Gov. Jim Doyle last year, which proposed a tax on iTunes purchases. Fifteen states plus Washington currently levy taxes on Internet media downloads. State accountants view the tax as a natural parallel to retail purchasing, just with different venues. Since tax laws vary by state, a movement is underway called the Streamlined Sales Tax Project, which seeks to implement a uniform taxation code for its participants. A clearly defined categorization of computer software could be a major stumbling block. Some states tax media downloads because they’ve stretched the definition to include music and movies, in the sense that the file is executable and gets the computer to perform certain functions. Opponents of the legislation claim the tax code was not written to cover digital downloads and should not be grouped along with traditional software. These are the types of discrepancies the Streamlined Sales Tax Project seeks to avoid. The 1992 case, Quill vs. North Dakota, in which the U.S. Supreme Court established a proprietary rule called “nexus,” states companies are immune to taxes if they have no established business presence there. This could make things sticky for e-tailers who don’t offer tangible goods.

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

XMA Nominations Party Set for Nov. 17 at Avalon Hollywood

A night that sets the stage for the flagship XMAs, this year’s nominations reveal party will take place at Avalon Hollywood on Tuesday, Nov. 17, with red-carpet arrivals starting at 8 p.m.

BrattyGirls.com Launches Through PAYSITE

Producer Robert Peru has launched his newest membership site, BrattyGirls, through PAYSITE.

Arcom Issues Warnings to 3 Adult Sites Over Age Verification

French media regulator Arcom has issued formal notices to the providers of three adult websites that the agency says have failed to implement age verification as required under French law.

AEBN Reveals Ariel Demure as Top Trans Star for Q3 of 2026

AEBN has named its top trans stars for the third quarter of 2026, with Ariel Demure landing atop the leaderboard.

Porn Piracy: How AI Is Transforming Content Theft and Protection

Gone are the days when the word “pirate” primarily conjured images of clever scoundrels like Captain Jack Sparrow, swaggering across the high seas in search of gold and jewels. Today’s most prolific pirates operate in the darkest corners of the internet, armed with bots, scrapers and generative AI.

Playhaus Network Launches Official Website Through PAYSITE

Podcast platform The Playhaus Network has partnered with PAYSITE to launch a new home for its original programming, featuring comedy, uncensored discussions and appearances by adult performers.

Sportsheets Wins Trademark Infringement Case Against Copycat Website

The World Intellectual Property Organization (WIPO) has ruled in favor of Sportsheets in a case against a copycat website using an infringing domain.

Kylie Rocket, Derek Kage Cap AEBN's Top Stars for 3rd Quarter of 2026

AEBN has revealed its most popular performers in straight and gay theaters for the third quarter of 2026.

JustFor.fans Launches Android Version of 'JFF Create' Mobile App

JustFor.fans (JFF) has rolled out an Android-compatible version of its creator management mobile app, JFF Create.

Kink.com Wins Trademark Infringement Case Against Copycat Website

The World Intellectual Property Organization (WIPO) has ruled in favor of Kink.com in a case against a copycat website using an infringing domain.

Show More