As states try to plug their budget gaps, some are preparing to levy taxes on digital downloads.
Such action will have a direct impact on gamers who use digital distribution to purchase games and DLC. Music and other digital content will also be affected.
On behalf of game consumers, the Entertainment Consumers Association has launched action campaigns against such initiatives in Washington, New York and Mississippi. ECA President Hal Halpin explained the move in the letter below to Washington state members yesterday:
The Washington state legislature is currently proposing a bill which would impose a tax on digitally distributed products, known as House Bill 2075. The timing could not be worse. This bill would harm Washington consumers - including you - by raising prices at exactly the time that so many are feeling the repercussions of the economic fallout.
Speak up now and tell the Washington state legislature "no" to HB 2075.
One result of this legislation will be to suppress consumption, which will cause layoffs at effected businesses, including the video game industry, which employs many Washington residents.
Tell your representative to vote "no" on HB 2075.
In the midst of a financial crisis, bills such as this are precisely what consumers don't need. Please take the time to write your state representative, and also help spread the word by telling your friends in Washington State.
FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.
Comments
Re: ECA Mobilizing Protests Against Digital Download Tax ...
Where I draw the line with digital downloads is that you are not getting the same value for an item as with a physical copy.
Ask anyone who used yahoo's music service. If the service goes away then generally you are left holding a bag of dead DRM'ed music files.
If I have to pay taxes on the files that I download then I want government intervention. I want all digital downloads to be DRM free and I want LIFETIME gurenteed redownload capability.
Alternately the ability to resell my "purchased" items would be nice also. I can resell the old copy of civ3 I found in my desk but I can't really resell the copy of on the Rain-slick precipice of darkness that I bought from greenhouse.
Re: ECA Mobilizing Protests Against Digital Download Tax
Just a thought, maybe GPers and ECAers should check out govit.com. They are currently lacking the pro-gamer voice in reguards to HR 231.
Re: ECA Mobilizing Protests Against Digital Download Tax
It is refreshing to once again see the ECA support the idea of keeping government out of games. I support this effort 100%.
Re: ECA Mobilizing Protests Against Digital Download Tax
Could not agree more, kudos to Mr. Haplin for this one.
Re: ECA Mobilizing Protests Against Digital Download Tax
To be fair, it's not unreasonable for it to be taxed because it's still a product and service. So far, digital downloads I think for the most part are GST or PST free. Not that I like it, but it's not unreasonable. And I don't think it really matters if it is a physical thing or not because stuff like Insurance isin't physical either yet is still taxed.
Re: ECA Mobilizing Protests Against Digital Download Tax ...
I currently live in a neighboring state to washington that has no sales tax.
Across the river is Vancouver, WA and I know several people who do all their shopping in stores on this side simply to avoid sales tax.
For big purchases like Cars, home electronics, etc this can be a very big difference in the price.
What in the world is going to stop someone from washington from spoofing their location with a PO box or a simple proxy server from a non-DD taxing state?
The problem becomes enforcement. When it's a different country, or continent you seldom have much choice in the matter as the difference is harder to spoof but I'd bet my last dollar that there are people in the UK, France etc that are playing MMO's on US servers without having to drop the extra cash for the VAT.
You can't make people pay taxes without some kind of oversight, it's simply an unnatural act and as seems to have been proven time and again people will always find a way to not pay them.
Even if WA does pass the bill, they would have to make every single online retailer enforce it and as was proven in the case of the NY online sales tax Amazon basicly told them to go Screw and stopped collecting it.
Re: ECA Mobilizing Protests Against Digital Download Tax
In the uk we already pay 17.5% VAT tax on all digital downloads...
and yes that even includes 17.5% added to mmo subscription fees.
I TOTALLY dont understand the justification.
Re: ECA Mobilizing Protests Against Digital Download Tax
17.5%?! Damn. That seems high. My state's sales tax in store is just under 10%.
Re: ECA Mobilizing Protests Against Digital Download Tax
I respect the spirit behind this, but DD is going to be taxed especially as more consumer switch from buying physical media to downloads. There's just too much potential tax revenue there for the politicians to ignore. Not to mention that because of these hard economic times the States are looking for any way they can get money for their budgets.
At best I think this will only delay them taxing it. I'll write to my rep and everything, but I'm not expecting DD to be tax free for very long.
Tea and cake or death! Tea and cake or death! Little Red Cook-book! Little Red Cook-book!
Re: ECA Mobilizing Protests Against Digital Download Tax
I think the thoughts behind it go something along the lines of:
Everyone is having a tough economic time. The state is as well as it's people. So in the state's answer to ease the state's tough economic times is to make things harder for the people by adding new taxes. We don't think so.
E. Zachary Knight
Oklahoma City Chapter of the ECA
http://www.theeca.com/chapters_oklahoma
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: ECA Mobilizing Protests Against Digital Download Tax
The usual problem isn't really with the Tax itself, the problem is the company selling the product now becomes a tax-collector for a state they aren't actually in. And as such these laws all require a company from another state to send them their tax money, however since many online businesses don't file their taxes in all 50 states.....you see the problem here.
Unfortunately, since these are all state taxes, it's hard to enforce across state lines without aggravating someone. Especially considering the constitution limits the State's jurisdiction to subjects within it's borders and interstate commerce is supposedly limited to the Feds.
Mainly it's just confusing and contradictive of the current practices.