Monday, April 07, 2008

California Will Tax Anything...

...and break the law to do it.

A proposed bill in California would charge sales tax for digital downloads. In order to get around the legal requirement that 2/3 of the legislature pass a tax increase, the legislature is trying to have the State Board of Equalization redefine digital downloads as "tangible personal property."

A sales tax can only be levied on "tangible" property -- things which can be "seen, felt, or touched," according to an article by Michelle Steel of the State Board of Equalization. The legislature wanting the Board of Equalization to define "digital goods" as "tangible property" is laughable.

As Steel writes, "It eliminates accountability in the state budget process. State legislators would have a political incentive to send all future tax increases to the Board of Equalization in order to avoid a bad political vote."


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