MINNEAPOLIS (WCCO) — As part of the new legislative session, one state senator is introducing a bill to impose a state sales tax on digital media. At the moment, Minnesota is one of a handful of states that does not tax most digital downloads.
Minnesota is not in sync with the 21st century economy, according to Democratic Sen. Ann Rest, the Tax Reform Committee chair.
She is leading a tax reform effort to eliminate outdated taxes, and phase in new ones.
But taxing digital downloads isn’t all that new. Many states already do it.
— 33 states tax software.
— 22 tax digital movies, music and books.
— 6 tax all digital products.
Some powerful local businesses are also behind the idea, which would impose a sales tax on items purchased at websites like Amazon.com. The tax would also exempt businesses that have brick-and-mortar stores in Minnesota, like Best Buy and Target.
Sen. Dave Thompson, the ranking Republican on the Tax Reform Committee, says younger Minnesotans would feel the sting of a digital tax the most.
“I’ll call this a youth tax,” he said.
Rest, the senator behind the bill, says one big goal of the reform effort is to streamline Minnesota’s tax system, broadening the tax base — and actually lowering the sales tax.