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Cohen, Chairman Lamar Smith Introduce Bipartisan Bill to Protect Consumers From Unfair Taxes on Digital Goods

December 13, 2013

[WASHINGTON, DC] – Congressman Steve Cohen (TN-09) joined Science, Space, and Technology Committee Chairman Lamar Smith (TX-21) this week to introduce legislation that would protect consumers from unfair taxes on digital goods, like those purchased over the Internet or on a smartphone. The Digital Goods and Services Tax Fairness Act of 2013, H.R. 3724, ensures that digital goods are not taxed at a higher rate than their tangible counterparts.

“Digital goods and services are quickly becoming a driving force in our national economy,”said Congressman Cohen.“We need to establish a uniform framework for the taxation of digital goods and services so consumers won’t be double-taxed. Our Digital Goods and Services Tax Fairness Act would accomplish such a goal.”

Chairman Smith said:“In our modern economy, more and more consumers are buying digital goods and services rather than tangible goods. While books are still sold in stores across the country, readers can now download hundreds of digital books, newspapers and magazines instantaneously with the click of a mouse from the comfort of their home. But as technology advances, it is important that tax policies do not unfairly penalize consumers who choose to download digital goods rather than purchase their tangible counterparts. This legislation promotes tax fairness and ensures that consumers are not discouraged from purchasing digital goods.”

This legislation would prevent the taxation of mp3 and software downloads, for example, at a higher rate than the tax on music and software CDs. The bill would also make sure that consumers do not suffer tax discrimination because they choose to purchase a good in digital rather than tangible form.

The Digital Goods and Services Tax Fairness Act of 2013 is also cosponsored by Representatives Spencer Bachus (AL-06), Steve Chabot (OH-01), and Howard Coble (NC-06). Companion legislation was introduced in the Senate earlier this year by Senators Ron Wyden (D-OR) and John Thune (R-SD).