Rep. Devlin: Digital Tax Hike Starts Oct. 1

Posted on September 23, 2019 by jdooley


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Dear Neighbors,

Connecticut users of the streaming music service Spotify received emails last week that the state sales taxes will be going up starting next month.

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.

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.

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.

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

FOLLOW STATE REP. LAURA DEVLIN

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