News Article

Wisconsin To Tax Digital Downloads

Posted by Corbie Dillard

With the popularity of digital downloads at an all-time high, it should come as no surprise that governments are beginning to look at ways to tax them.

The State of Wisconsin just recently signed a bill into law that allows for a 5% tax on all digital downloads spanning music, books, ring tones, and even video games. The state expects to rack up nearly 7 million dollars yearly from the tax once the law goes into effect on October 1st of this year.

Other states are also looking into taxing digital downloads including North Carolina and New York, so it would seem likely that other states would soon follow. It seems gamers had better get ready to pay a little more for their digital download gaming fix if this is any indication of things to come.

We'll keep you up to date in the event other states decide to begin taxing digital downloads in the future.

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User Comments (32)



Cthuloops said:

I call bullsh*t. This just shows how incredibly indebt our government is. They see the huge profit of the Internet market and just have to tax it.



thewiirocks said:

Way to put Wisconsin at a disadvantage, guys. Considering that most digital download companies are physically located in other states (or even other countries!) there's no way in hell they're going to be able to collect these taxes. All they're doing is adding even more incentive for technology companies to avoid setting up in Wisconsin.

Wisconsin hasn't had decent leadership since Thompson left for Washington. Bring back Tommy Thompson!



IAmNotWill said:

How is this supposed to work? I hope I don't get a message saying "OH before you download this, you must pay this much.", everytime I download a game. We should BOYCOT if this gets to every state.



gaz_4578 said:

Looking specifically at Wiiware and VC games, haven't you already paid tax when you've brought Wii points in the first place?!



anthonyb said:

I'm with gaz- Nintendo's already taxing us for Wii points. Will this cause an additional tax??



WiiGuy said:

This is crazy....
Well, sence i don't live in Wisconsin so i guess i don't have to worry



Philip_J_Reed said:

Trust me, if this works, other states will do it, too. It's pretty much a way for the state to make FREE money without providing any service whatsoever.

I hope this crashes and burns fast so it doesn't set a precedent. BOO.



Objection said:

@gaz_4578-If you buy them in store. If you buy them via credit card, then they're tax free as of now. So 2000 pts is $20 plus sales tax in store or $20 via credit card.



Nintendork said:

Well, I'll give 'em this. It's a smart idea to basically nab free money. It still sucks though.



SilentJ said:

This was bound to happen. I was actually surprised there was no tax the very first time I downloaded a game. This is fantastic news on top of the California sales tax going up.



Philip_J_Reed said:

Not sure what you mean by "Nintendo collects tax through online sales," but OB is right. 2000 points is advertised in the shop channel as costing $20, and that's exactly the amount the buyer is billed. No additional fee is added.



Mike1 said:

What else is new, our government is always looking for a way to grab free money. Just like how the state of Connecticut has expanded the retarded bottle bill to include water bottles now. Either way, when you want to play, you have to pay.



Ian_Daemon said:

This would only effect a minuscule amount of console gamers and a minority of PC gamers...



threedee said:

i'm in ohio, and when i buy wii points with a credit card directly from my wii, it costs me $21.95 for 2000 points.



vherub said:

unfortunate winds, maybe I should get a credit card from a state that doesn't charge sales tax



Cthuloops said:

I live in Indiana and when I buy points there is no tax on them. They are actually, for once, exactly $19.99. Guess you should move to Indy then!



Bensei said:

That won't work on the Wii for several reasons:

1.) Nintendo won't raise prices afterwards (although Nintendo could just reduce their profit to pay the taces)
2.) You can easily change regions or countries, so if not whole Europe and Australia or all the NoA countries ask for the same % of taxes, Gamers will just switch to Canada or Austria or whatever...



Philip_J_Reed said:

@ Ian Daemon:
Yes, right now it affects only a small amount of customers. But if the download tax gets established as a precedent, especially in this economic climate, it can very easily be adopted by any other state who cares to do so.

You realize Nintendo isn't getting taxed, right? The buyer is. It's just like any other kind of tax. If there's a 6% tax on bread and the bread costs $1, you pay $1.06 for the bread. The bread company doesn't cover the tax for you, so Nintendo is not going to raise their prices. They are still collecting the same amount for every download.



Sycoraxic98 said:

The price of a civilized society are taxes. They have to come from somewhere if we, as a society, want roads, schools etc. Here's the outrage: Wisconsin banks are able to move their profits to Nevada "branch offices" to avoid taxes. It's legal, but we chumps pick up the tab on that.



Philip_J_Reed said:

"The price of a civilized society are taxes."

...which we already pay. I don't mind paying income tax because it goes--potentially--to helpful federal programs and social security, both of which benefit me. I don't mind paying tolls on the highway because I like having well-maintained roads. I don't mind paying state sales tax because I like living in a clean, safe area with good schools and a police department.

But the download tax provides us with no additional service whatsoever. We're not buying anything from the government; we're buying from a private corporation. The government has nothing to do with the service, and is instead just reaching in to grab free money.

They want us to pay more taxes? Fine. Offer us a service and ask us to pay for it. Don't just stick a mysterious hand into a service we already pay for and expect us to gladly turn over more money for no conceivable benefit whatsoever.

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