Congressmen Cohen, Smith Introduce Bipartisan Bill to Protect Consumers from Unfair Taxes on Digital Goods

October 12, 2018
Press Release

WASHINGTON – Congressmen Steve Cohen (D-TN) and Lamar Smith (R-TX) today introduced legislation to protect consumers from unfair taxes on digital goods and services like those purchased over the internet or on smartphones. The Digital Goods and Services Tax Fairness Act ensures that digital goods and services are not taxed at a higher rate than their tangible counterparts.  

 “Digital goods and services have become a driving force in our national economy,” said Congressman Cohen. “We should make sure consumers are treated fairly and not double-taxed.” 

Congressman Smith said: “In our modern economy, more and more consumers are buying digital goods and services rather than tangible items. 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 prevent tax discrimination for consumers who chose to purchase a good or service in digital rather than tangible form. 

A Senate version of the measure was introduced Thursday by Senators John Thune (R-S.D.) and Ron Wyden (D-OR).