New York Commission Suggests Sales Tax on Digital Purchases in Reform Report

Friday, Nov 15, 2013  |  Updated 5:32 AM EDT
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NY Commission Suggests Sales Tax on Digital Purchases

NBC 4 New York

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A New York commission examining tax fairness vouched for a sales tax on music, e-books, apps and videos bought online as part of a bevy of proposed changes in the state's sales, estate and franchise taxes.

In a report released Thursday, the New York State Tax Reform and Fairness Commission said New York is currently losing $35 million each year by not taxing purchases from digital content stores such as iTunes. The panel predicts that that lost revenue will increase as more people buy movies, e-books and music online. Twenty-three states already tax digital purchases, the report states.

The panel also said in the report that they want to eliminate the estate tax on 73 percent of New Yorkers by raising the exemption threshold from $1 million to $3 million, saying it now wrongly targets middle-class taxpayers. They propose revising sales tax exemptions to help low-income residents, simplifying corporate and bank franchise taxes and annually evaluating business tax credits to determine their effectiveness.

The report says state and local governments levied about $146 billion in taxes for the most recent fiscal year.

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