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WSJ: States Eye Taxes on Streaming Video

States Eye Taxes on Streaming Video and Cloud Computing
Decline in DVD and CD sales has taken a bite out of revenue in recent years

by: Mark Peters and Greg Bensinger
August 20, 2015

State tax officials are trying to catch up with fans of “Orange Is the New Black” and One Direction.

With sales of DVDs, videogames and traditional packaged software slumping for years, more state and local governments are eyeing technologies, such as streaming video subscriptions and cloud computing, to help make up for hundreds of millions of dollars or more in lost revenue.

Applying age-old sales taxes to the era of new media hasn’t been simple. States have long taxed tangible goods, but the broad array of new digital products often don’t fit the category. Some states are trying to use existing laws, while others are taking on the politically thorny task of rewriting tax rules.

The result is a patchwork of tax policies—and some new laws—for fast-growing slices of consumer and business sales. While taxes on digital entertainment and software represent only a sliver of the $271 billion that states collected in sales taxes last year, the issue highlights the challenge states and localities face as technologies rapidly shift.

Read more at the Wall Street Journal.

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