Digital Tax Hike Starts Tomorrow

Posted on September 30, 2019 by admin


Last week, Connecticut users of the streaming music service Spotify received emails that the state sales taxes will be going up.

Effective 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, will be subject to sales and use taxes at the standard 6.35% rate.

Currently the tax is 1% on digital goods.

In an effort to capture a new revenue stream as people flee cable for lower cost options, taxes on digital downloads and services are being raised.

So, if you are a user and subscriber of Netflix, Hulu, iTunes and Amazon Prime, among others, your taxes will increase.

But let’s say you want to download a new book on your Kindle or movie on your iPad, you will also have to pay the increased tax.

The increase in taxes on digital downloads is expected 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 Prewritten Software policy statement here: