Wash state poised to impose "digital goods" sales tax

Washington state could soon join a host of other states in imposing a sales tax on "digital goods," including music, video and electronic books. A bill that passed the Washington state House and Senate and awaits Gov. Chris Gregoire's signature would impose sales and use taxes "on certain streamed or remotely accessed digital services, goods, and prewritten computer software," according to a bill report.

The legislation creates a new tax revenue stream for state coffers, but it could also mean big changes for Seattle area tech companies that deliver services digitally. 

Here's an alert that just went out from Ken Myer, CEO of the Washington Technology Industry Association: 

This bill is the result of an eighteen month effort by a legislative task force that included the state Department of Revenue, local governments, academics and various business and industry representatives. Both Amazon and Microsoft had representatives on the task force and WTIA attended the task force meetings, testified at legislative hearings and worked with legislators and other interested business groups.

The legislation imposes a sales tax on “digital products”, which includes specifically defined “digital goods” and “digital automated services." Digital products include digital video, digital audio, digital books, ringtones, online subscriptions and other online services where a consumer pays for use of software or a service online. There are a number of exemptions from the definition of digital products, included downloaded software (which is already considered a retail sale).  The effective date of this bill will be July 26, 2009.

At least 18 other states are claiming the authority to tax digital goods, according to a recent story by Cnet.

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