Amazon, Apple, Cable Operators and Telcos Form Super Coalition to Fight E-Commerce Taxes

Paul Lilly

The Justice League of America is a collection of super heroes working together to fight the evils of the world and protect us from those who would otherwise do us harm. And the Download Fairness Coalition, who we will henceforth abbreviate DFC? That's a collection of tech giants, cable operators, telecoms, and other entities whose common goal is a little more self-serving -- to fight against "discriminatory taxes of digital goods and services" -- but perhaps equally needed.

Members of the DFC include Amazon, Apple, Comcast, Cox Enterprises, Hispanic Technology and Telecommunications Partnership, National Black Chamber of Commerce, Time Warner Cable, T-Mobile, US Telecom, Verizon, and more than a dozen others. Bringing them all together is a common desire to create a "national framework" for taxing digital commerce to replace the overlapping policies that can sometimes be applied multiple times on the same transaction, Broadcasting & Cable reports .

"Unlike making a purchase at a store of a tangible item – when you purchase a digital good – you are potentially subject to paying sales tax more than once," DFC explains. "For example, if you live in Colorado and you make an online purchase of an app in Virginia, and the company from whom you bought the app has their servers located in a Texas, any and all of those states could lay claim to the right to tax your purchase.

Cable companies are joining the fight simply because they're spooked by the current framework, or lack thereof as the case may be. Their concern is that "technologies and platforms are moving in that direction where they are in those same kinds of markets ultimately in terms of digital goods and services, whether it is movies or songs."

This isn't a fly by night coalition, either. DFC chose Sam Whitehorn, a former top Senate Commerce committee staffer, as their head. And wasting no time, the group is backing a new bipartisan bill called the "Digital Goods and Services Tax Fairness Act" proposed in the Senate last week by U.S. Senators Rony Wyden (D-Ore.) and John Thune (R-SD), and in the House by Judiciary Chair Lamar Smith (R-TX) and Steven Cohen (D-TN).

In short, the bill prevents state and local governments from taxing digital goods and services if they do not tax comparable tangible goods, and also prevents multiple state taxes on those goods. For example , if you're not taxed on a physical newspaper subscription, the bill would prevent you from being taxed on an electronic subscription to the same paper, Senator Wyden says.

The House Judiciary Committee will hold a hearing on the bill on May 23.

Download Fairness Coalition Homepage

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