Blog Post

New Jersey Approves Download Tax

The state of New Jersey has extended its 6 percent sales tax to include online digital goods, or any subscription to a website, information downloaded or digitally transferred product…the Senate Budget Committee approved the plan 9-6 Monday.

Online music sites which sell songs for 99 cents would now sell it for $1.05. New Jersey could become one of the first states to tax digital material downloaded from the Internet. The state expects to collect at least $10 million a year from digital downloads. That estimate is based in part from sales taxes collected from purchases of CDs, movies and other materials at stores in New Jersey.

But the law applies only to companies in New Jersey, making it difficult to collect from out-of-state suppliers of digital products.