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George Harrison wrote the Beatles tune "Taxman", which has become an anthem for anti-tax activists. Ironically, even as the Beatles song finally becomes available as a digital download, a little tax may be added to its cost.

Digital entertainment had, in many states, been given a bye in taxation as part of the 'nurturing the internet' process. However, as states see their budgets strained to the breaking point, many are looking under every rock for new revenue. Smokers have had the last puff of smoke wrung out of them, the ignorant have gambling opportunities shoved in their face at every opportunity, and red light cameras are spitting out tickets like Lou Pinella spits sunflower seed shells. And still they need more.

The download tax is already in effect in a number of states, and seems bound to spread. It requires little effort on behalf of the state. The vendor is responsible for determining what taxes a buyer owes, collecting those taxes, and paying them to the state in question. And once all states start feeding from this rice bowl, they will have a strong incentive to join the music industry's war on file-sharing. Obviously, online anonymity is a serious problem for tax collectors, so it too will come under fire.

An 'iTunes Tax', as it is called, would also extend to movies, books, any digital entertainment/information you download. Given the growth of streaming content, for which we pay per iteration rather than buy to play in perpetuity, look for states to include a tax on these fees under the digital tax umbrella.

Of death and taxes, I suspect we'll be more likely to see the former drop from the ranks of the inevitable than the latter.

thanks, Engadget

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