Connecticut bill could apply sales tax to downloadable games

The Connecticut State Senate has introduced a new bill that seeks to apply sales tax to all downloadable products, affecting digital games and all other related content.
Taxes on digital goods in the United States are far from uniform; in some states, these goods go tax free, while in others they function just like any other product. A recently introduced bill in Connecticut now hopes to ensure that that state enforces its sales tax on downloadable games, videos, and more. The Connecticut State Senate says that the bill would apply the state's 6.35 percent sales tax to "digital movies, books, music, ringtones, audio and video works and similar downloadable products." This would include digital games and all related content. The Entertainment Consumers Association has already spoken out against the bill, claiming that taxing these games "is not the right way to aid an economic recovery." Connecticut residents interested in contacting their local representative can do so via the ECA's website. If approved by the State Senate, the law will come into effect on July 1, and will apply to all digital sales that take place on or after that date. Of course, Connecticut would not be the first state to enforce a sales tax on downloadable goods. Nearly half of all U.S. states already enforce this tax, and if Connecticut approves its bill, it will simply become that latest in a growing lineup. Even though select retailers may not apply sales tax when customers purchase downloadable products, customers in the affected states are still obligated to report and pay taxes on those goods. Oklahoma also tried to enforce an additional tax on games earlier this year with a bill that would have placed a 1 percent sales tax on all video games rated "T" or higher by the ESRB. That additional tax would have funded programs to stop obesity and childhood bullying, but the law was struck down since the legislature saw no decisive link between violent games and these societal issues.

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