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New Report Highlights Need for Digital Goods Tax Reform

WASHINGTON – A new report released this week by the Hispanic Institute “Taxes and Fees: Barriers to Hispanic Connectivity” highlights the need for Congress to pass legislation that would establish a federal framework for the taxation of digital goods and services.

“Right now, thanks to a regressive patchwork of state and local taxes, Americans are paying more than they should for their phones and the products they buy online,” said Gus West, Board Chair of The Hispanic Institute. “This unfair tax burden hits hardest those who can least afford it, including many Hispanics.”

According to the report, the overlapping tax jurisdictions that exist today present a particular threat to Hispanics who conduct a higher amount of their commerce in the digital marketplace compared to other ethnic groups – including whites. Of note, projections show that Hispanics are set to spend more than $500 million on mobile applications in 2012 alone.

“This report highlights the need for Congress to act today to ensure that the online marketplace for digital goods and services is not overburdened with overlapping and discriminatory taxes and fees,” said Sam Whitehorn, executive director of the Download Fairness Coalition. “The bill’s federal framework will ensure that all consumers are able to continue to engage in this innovative and expanding marketplace.”

Currently, the Digital Goods and Services Tax Fairness Act – S.971 (Wyden/Thune) and H.R.1860 (Smith/Cohen) is being debated in Congress. The bill has strong bipartisan support in both chambers.

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The Download Fairness Coalition is an organization that educates policymakers about the benefits of the digital economy. The organization is committed to policies that increase access to digital goods and services for all consumers.

For more information visit our web page at dfc01.wpengine.com.