New Digital Tax Hike

Posted on October 16, 2019 by admin


Facebooktwittergoogle_plusmail

Connecticut users of the streaming music service Spotify received emails recently that the state sales taxes would increase in October.

As of October 1, 2019, sales of “digital goods,” which includes audio works, visual works, audio-visual works, reading materials or ring tones, which are electronically accessed or transferred, are subject to sales and use taxes at the standard 6.35% rate. Previously the tax was 1% on digital goods.

These changes are part of the nearly $1.7 billion in tax hikes that the majority party and governor included in the budget they passed in June. This is an effort to capture a new revenue stream as people flee cable for lower cost options such as Netflix, Hulu, iTunes, or Amazon Prime. Books downloaded to a Kindle or movies downloaded to an iPad or computer, or songs purchased from services such as iTunes will also be subject to the increased tax rate.

With an increased percentage of residents who stream and download their content (music, movies or smartphone apps), as opposed to watching on traditional cable television or listening on the radio, their budget expects to raise $27.5 million this fiscal year and $37.1 million in the next year.

Read the DRS Sales and Use Taxes on Digital Goods and Canned or Pre-written Software policy statement here: https://www.cthousegop.com/wp-content/uploads/2019/09/DigitalTaxUpdate.pdf.

Whit Betts

State Representative 78th District – Bristol, Plymouth, Terryville

As always, if you have any questions or concerns feel free to reach out to me at (800) 842-1423, or by email at Whit.Betts@housegop.ct.gov. You can also follow my legislative activity by visiting repbetts.com or on Facebook at www.facebook.com/repbetts.