The North Carolina legislature has approved the final appropriations package for the $20B 2010 budget for the state (See legislation here) and presented it to our new governor. The legislation increases the state sales tax by 1% (effective Sept. 1), added a sales tax on "digital downloads" (including Apple iTunes) (effective Jan. 1) and various sin taxes (e.g. tobacco and beer).
I find it ironic that the state also approved an incentive package for Apple this year to the tune of $3 million a year initially and $12.5 million annually in later years. In return, Apple must invest at least $1B over the next nine years. See the legislation here (Senate Bill 575 ) and the story, house approves apple package.
There are actually two sales taxes related to online purchases. The first will assess sales tax on most digital downloads, including music, videos and ringtones, starting Jan. 1. That means a 99-cent iTunes download, for example, will instead cost $1.07.
The second Internet-related tax is more complicated. Basically, it will allow the state to begin charging sales tax Sept. 1 on purchases from online merchants who make sales through referrals from N.C. Web site owners. Amazon.com has such a program, but discontinued it in North Carolina in June to avoid having to assess sales tax. The N.C. Department of Revenue is still figuring out how to implement the online-related taxes, spokesman Thomas Beam said For FAQs on the details, see The News Harold (Morganton, NC) online post.
2 comments:
what about caliptix downloads to the firewall?
We are currently investigating how this may impact sales tax collected by Calyptix on NC sales.
Currently, the NC Dept of Revenue has directed us to collect sales taxes for subscription renewals as they are connected to the sale of the hardware. I would note that the final legislation did not include certain B to B software sales suggesting that the downloads may be excluded. However, we will need to see the final regulations and guidance to make a final determination. We undsrstand the Deptartment of Revenue is currently working on this part.
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