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Apple’s New iPad a Boost to Digital Goods

After months of rumor and speculation, Apple released today its highly-anticipated iPad3. The updated device, which includes an improved camera, enhanced Retina display and boosted graphics has made this next generation model the subject of much anticipation and excitement. However, while the iPad3 is being lauded for its many new features, there is a still a fundamental problem that affects not only iPad users, but also all those who own smartphones, tablets and computers. That problem is the taxation of downloaded books, movies, songs and apps, which are known as digital goods.

 

The multitude of items available to be purchased online for the iPad 3, reinforces the need for a new framework to ensure consumers aren’t double taxed on downloads to their new devices. Even though digital goods have been on the market for quite a while, Apple claims there are 200,000 apps for the existing iPad2, for example, there are still no guidelines that determine how these goods are taxed and what jurisdictions have the authority to collect that money. This ambiguity could potentially allow for multiple taxes from multiple sources on a single item, and unnecessarily raise prices for consumers.

 

The digital sector continues to be one of the only industries in our economy that is growing, increasing both revenue and job creation, but consumers are still at risk for double or triple taxation on their digital downloads. This must be fixed so that consumers are protected.

 

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