Do you buy or sell ebooks? List of states that tax digital products

February 1st, 2012 → 1:39 pm @ Carol

Sales tax…it’s changing at the speed you can download an ebook to your Kindle Fire!

There are now several states that tax digital downloads.

https://taxes.about.com/od/statetaxes/a/sales-tax-for-digital-downloads.htm

States That Tax Downloads

These states have passed laws that impose sales taxes on digital products (keep in mind that digital products are defined differently in each state and some states tax only certain digital products and exempt others):

• Alabama
• Arizona
• Colorado
• District of Columbia
• Connecticut
• Hawaii
• Indiana
• Kentucky
• Louisiana
• Maine
• Mississippi
• Nebraska
• New Jersey
• New Mexico
• North Carolina
• Ohio (as of Sept 2013)
• South Dakota
• Rhode Island
• Tennessee
• Texas
• Utah
• Washington
• Wisconsin
• Wyoming

 

If you buy digital music, videos or ebooks, you should be reporting and paying sales tax to your state on those purchases.

 

If your selling digital products, you should be collecting and remitting sales tax to your state.

 

Carol Topp, CPA