Connecticut users of the music streaming 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,” that are electronically accessed or transferred, 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.
The new tax rate also applies to a purchased product, like Adobe, that you pay a monthly subscription fee on.
Currently the tax on digital goods is 1%.
With an increased percentage of digital consumers streaming and downloading their content (music, movies or smartphone apps), as opposed to watching on traditional cable television or listening on the radio, the majority party and the governor hiked these taxes on countless residents. This is an effort to capture a new revenue stream as people flee cable for lower cost options.