Republicans in the Iowa Senate are raising a ruckus about a proposed state sales tax on Internet music downloads. The Iowa Department of Revenue wants to begin collecting sales tax on the books, songs and ring tones Iowans buy on-line. Officials argue it’s only fair to tax on-line transactions because traditional Iowa retailers collect sales tax from folks who buy stuff in their stores.
But Senator Jeff Angelo, a Republican from Creston, says it’ll be impossible to enforce. "I just think that most people will find it ridiculous," Angelo says. "…I’ve got to keep track now of all the ring tones that I’ve downloaded or my 100 Beyonce songs that I just downloaded yesterday and calculate how much I owe for that. If I’m an iPod customer, it’ll be five cents per Beyonce song. If I’m (a) Yahoo! Music (customer), it’s only five percent on what I paid for the month."
State officials estimate the state would get about $5 million more in tax revenue if the tax is approved. "What we’re seeing is just this enormous lust for revenue that any activity now that people want to engage in, we’re looking for a way to tax it even though it’s incredibly unfair and impractical to do it," Angelo says.
The proposed sales tax on downloads is part of a larger bill that has all sorts of tax policy included. Angelo says he’ll try to rip the download tax out of the bill when it comes up for debate in the Iowa Senate and he predicts senators will start hearing from folks on this. "I imagine we might even see an angry teenager march on the capitol," he says.