Digital download tax causes mix of confusion

Friday, April 25, 2008 at 2:02am

Wait. iTunes purchases are already taxed, right?

Tennesseans utilizing iTunes receive a digital receipt showing that their 99-cent purchase of the latest hit song is subject to state sales tax, upping their bill to $1.08 for a single song.

Apparently, the Tennessee Republican Party didn’t get the memo.

In a press release Thursday, the Tennessee GOP claimed that the Bredesen administration was proposing a new tax on downloading digital music, movies, books etc.

“The Tennessee Republican Party today urges voters speak out against Gov. Bredesen’s plan to tax digital downloads such as songs from iTunes,” the GOP said in a press release.

Department of Revenue officials quickly cautioned, however, that digital products are already taxed and have been since Jan. 1, 2008.

The Tennessee GOP’s press release “contains a whole lot of misinformation and it’s not accurate,” said Reagan Farr, the commissioner of the revenue department.

What the Tennessee Republican Party seized upon was a draft of the Bredesen administration’s annual “technical corrections bill,” which is traditionally used to close loopholes that some businesses use to avoid paying some taxes.

Within the technical corrections bill, there is a section that changes how digital products are classified in the tax code, Farr said.

The portion of the technical corrections bill would make digital products tangible personal property, thereby clearing up what is taxable and what is not and alleviating the tax code from some previous confusion

“Let’s acknowledge that books, songs and movies, more and more, are going to be purchased and delivered digitally and quit having to jump through all of these hoops,” Farr said.

As for the confusion perhaps caused by the Tennessee Republican Party, spokesman Bill Hobbs said he doesn’t now “dispute” that iTunes sales are taxed.

Hobbs said he based his description on a memo from the law firm of Waller Lansden Dortch & Davis, which called the section of the technical corrections bill the “Digital Products/iPod tax.”

“It’s probably an unfortunate choice of a headline, but Waller Lansden called it that, and I just keyed off of what they wrote,” Hobbs said.

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By: BADCOPS on 12/31/69 at 6:00

I say eliminate the pork spending, the idiot bunker and the bunker mentality and learn to live with what is in the budget oppossed to another tax.

By: HokeyPokey on 12/31/69 at 6:00

you can't read very well, can you, bad? There is not "... another tax," you silly pudding. Only Hobbs again runshing to "key off" what he thinks is the most damaging text he can find irrespective of where it comes from, what it's about or what it really means. If I were a Republican in Tennessee, I sure would not admit it.

By: ecampf on 12/31/69 at 6:00

A good rule of thumb is, if the Tennessee GOP, or for that matter if any GOP group says it , it's probably not true.

By: vchester on 12/31/69 at 6:00

Let me see if I understand the Kool-aid formula correctly. Democrat=good, Republican=badOk, I get it now...

By: HokeyPokey on 12/31/69 at 6:00

if you think there's a formula, v, then you're looking the wrong direction.

By: gdiafante on 12/31/69 at 6:00

You don't understand the formula vchester. Extreme lefty= bad; Extreme righty= badThose in the middle= screwed.

By: vchester on 12/31/69 at 6:00

HoPo, I don't need a formula. I just want to make sure I know what I'm dealing with here...

By: TITAN1 on 12/31/69 at 6:00

Exactly, gdiafante!

By: tennesseegop on 12/31/69 at 6:00

iTunes downloads are now taxed, but plenty of digitally-delivered products are not currently taxed in Tennessee and the "technical corrections" bill contains a laundry list of things that are not currently taxed but may soon be, according to the analysis of the bill by the business tax law experts at Waller Lansden.Details at http://www.tngop.org/wordpress/2008/04/update-april-25-2008/