Lawmakers look at adding state sales tax to iTunes downloads - KMSP-TV

Lawmakers look at adding state sales tax to iTunes downloads

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ST. PAUL, Minn. (KMSP) -

There's been a lot of tax talk at the Capitol this week, and lawmakers looked into the idea of adding a state sales tax to iTunes downloads on Thursday.

Senate File 35 would extend the sales tax to digital downloads of movies and music purchased through iTunes as well as to e-books bought on Amazon or through Barnes & Noble.

Sen. Ann Rest, a Democrat from New Hope, sponsored the bill, and she argued extending the sales tax to online purchases will make such buys the same as those done at local stores.

"Think of it as -- you go into a store and buy a CD with some music on it," she explained. "That's the same product as downloading it. You can also buy an audio book -- you'd pay tax on it. If you download it, you'd pay the same thing."

The tax would not impact streaming services like Netflix or Pandora, but it would apply the state's 6.5 percent sales tax to any 99-cent song on iTunes, raising the cost by 6 cents.

Similarly, anyone who wanted to download the new Batman movie for $19.99 would need to pay an extra $1.30 in sales tax.

For books, the No. 1 New York Times Best Seller is currently going for $12.99, but the tax would tack on an additional 84 cents.

Rest said her goal is to broaden the tax base so that lawmakers can look at lowering tax rates to become what Republicans like to call revenue neutral, meaning that although more items are taxed, consumers are not paying more.

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