Taxing Digital Downloads

Fifteen states and the District of Columbia now tax the purchase of digital downloads of music, movies and electronic books. With a market for downloads exploding to $1.1 billion worldwide, this has meant that buying music has increasingly shifted from the local music store to online. Leaving online retailers untaxed would mean not just revenue loss but putting home-state retailers at a competitive disadvantage to the Internet retailers. New Jersey's Gov. Jon Corzine is proposing to add his state to the list of those taxing downloads, which include Texas, Indiana, Washington state, Alabama, Arizona, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, New Mexico, South Dakota, Utah and West Virginia..