New Jersey, could P2P tax evasion?

[Mels_Smileys45]

The governer of New Jersey announced that on October 1st all music and video downloads will now be taxed and cited iTunes as a main target. But could this spell trouble for P2P users caught downloading? In the past the RIAA/MPAA have went after uploaders but by this new law New Jersey residents may be charged with tax evasion if caught downloading films or music illegally. Sound sick? You freakin' bet! Its a bit of a stretch but I can only wonder how far the RIAA would press the "lost sale" arguement in pursuit of a tax evasion convection.


NJ to start charging iTunes tax this Sunday (October 1st)


Plagued by a $4.5 billion budget deficit that briefly closed down the state’s government, New Jersey Governor Jon Corzine passed legislation this July that raised the New Jersey sales tax from 6% to 7% on all taxable items. But apparently that wasn’t good enough.

Today Governor Corzine announced that he has expanded the list of taxable items for New Jersey residents, and starting Sunday (October 1st) that list now includes iTunes downloads.

The official list of newly taxable items is as follows:

• Downloaded music and video
• Shipping and handling charges
• Flooring and carpeting installation
• Storage space
• Tanning, massage and tattooing
• Data processing
• Limousines
• Health, shopping and other club membership fees
• Parking garages and lots
• Non-clothing cleaning services
• Landscaping
• Magazines and periodicals
• Investigation and security services, such as security alarms and armored cars

That’s right, all music and video purchased via the iTunes music store (and any online service) will now be taxed at the same 7% rate that retail DVDs and CDs are. As a resident of NJ, I feel this both blows AND sucks. While in my mind I cannot justify any reason why a music download should NOT be taxed and a physical CD SHOULD (other than the state of NJ has absolutely NOTHING to do with the sale of iTunes songs), it still feels wrong. I am not sure exactly how well Apple and the NJ government will be checking on the downloads, but I, for one, will be “moving” to Virginia, or NY, or someplace without the taxes. At least as far as my iTunes profile is concerned.


http://macenstein.com/default/archives/429


New Jersey law reads:


Source: New Jersey Statute Section 54:32B-3

Information/Software Purchased via Downloading from the Internet
New Jersey does not apply sales tax to charges made for information downloaded from the Internet because the state does not consider this a transfer of tangible personal property.

http://www.vertexinc.com/TaxCybrary/Intern...te_by_state.asp


Seems a bit contradictory to me.

[Mels_Smileys45]

Silly thread title! Ugh!

[shawners]

I know for a fact you dont use iTunes, and you probably wont feel the tax pinch on any of these items.
If people are willing to pay but this seems like it will get more money from the higher paid NJ residence, and i doubt it will contribute enough for the debt the state is in, and wait til they see what little iTunes will rake in. May have went in to debt drawing up that law.
The official list of newly taxable items is as follows:

• Downloaded music and video**No
• Shipping and handling charges** Somewhat
• Flooring and carpeting installation**Hardly ever
• Storage space *Not likely for while
• Tanning, massage and tattooing **Probably not going to happen
• Data processing *** What data you need processin?
• Limousines** Most unlikely unless your getting married, even then others may pay for it
• Health, shopping and other club membership fees **Tax is usually built in
• Parking garages and lots *Probably be included and not that high.
• Non-clothing cleaning services ** Stuff you cant clean by hand?
• Landscaping ***We have hispanics here in Texas, and they dont pay taxes.
• Magazines and periodicals ** Usually you can get download them monthly
• Investigation and security services, such as security alarms and armored cars ***Most likely you wont use it.