Looking for more ways to tax: cellphones and ebook downloads

Posted By on January 1, 2011

According to a Smartmoney.com article by AnnaMaria Andriodis, smartmoneywe could see states and counties increasing taxes on new technology such as cellphones and e-books. Unlike Uncle Sam, state and county governments are required to balance their budgets and as local sales taxes and both the real estate and income tax stream of tax revenue dwindle they are looking to “a variety of pockets” and “they’re looking at what’s new and hot,” according to independent technology analyst, Jeff Kagan.

One of the more chilling examples of the overreaching taxman being cited is the downloading e-books. “When you buy an e-book for that new Kindle … don’t be surprised if you’re taxed not just by the state you live in, but also by the state where the server that you’re downloading from is located. A buyer living in New Jersey who purchases a $10 e-book housed on a server in Texas might pay $1.52 in taxes unclesamtaxgraphic(7% sales tax in N.J.; 8.25% in Texas).”

As for cellphones, according to the research in the article, expect taxes on conventional and data driven smartphone plans to go up “about 2%.” “On average, 15% of a monthly cell phone service bill is already made up of taxes and fees, compared to 7% for most other goods and services, according to CTIA. But in 23 states, taxes run even higher, including Washington at 23.64%, Nebraska 23.44%, Florida 21.31%, New York at 21.1%. Municipalities can — and often do — tack on a tax, too.”

Audio segment from the WSJ This Weekend Podcast:


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