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Editors note: The Department of Revenue now states certain digital products have been taxed since January 1, 2008. I-tunes users probably notice their $.99 download actually costs $1.08. The information from the Republican part was pulled from a Bredesen administration "draft" version of a technical corrections bill, which is used to close loopholes in business taxes.
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Tennessee Republicans are raising the alarm about a new tax proposal they say the Bredesen administration is formulating.
They say the Department of Revenue is considering a Digital Procuts/iPOD Tax.
An analysis by a Nashville law firm [1] claims that it would make digital purchases of movies, music, news and entertainment programs, ringtones, and electronic books subject to the retail sales tax.
The state is now facing a $500 Million dollar budget deficit.
And the growth of internet purchases has long been a problem for a state dependent on the Sales Tax.
A Digital Products/iPOD tax has not been formally submitted to lawmakers yet.
Still, the Tennessee Republican Party is urging voters to speak out on the possible tax.
Communications director Bill Hobbs say "Most states do not tax digitally-deliverd products. Tennessee shouldn't either and state government's current fiscal crisis should not be used by the Bredesen administration as an excuse to hit the people of Tennessee with a new tax that could cost them tens or even hundreds of millions of dollars."
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