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Originally Posted by Prepper
I pay sales tax on every ebook I buy for my Nook from B&N. I don't on things I buy from Amazon that I have shipped. I seriously hope this doesn't go anywhere.
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That is a slightly different issue: it sounds like CO doesn't make a distinction between physical and digital sales, and decides whether a sale is taxable based on whether the retailer has bricks and mortar presence in CO (as B&N does and Amazon I take it does not). Would you get taxed on Kindle ebooks?
But in many other states digital goods are not taxed at all, regardless. So in CA, you can buy ebooks (or MP3s or videos) from anybody and not pay sales tax. CA residents are under legal obligation to pay sales tax on 'tangible' goods, even if the (out of state, online) retailer does not collect it. CA wants Amazon to collect sales tax for 'tangible' goods (which the latter has agreed to start doing next year) but under current law, digital sales are still excluded.
So the issue here is whether those states are going to start collecting sales tax for the digital sales as well. I think it would be a very bad policy, but certainly this would not be the first of those. Actually, I'd be in favor of extending tax free status to physical books and media as well, for the same reason that newspapers and magazines generally are: democracies can only thrive with informed populace.