Wisconsin placing 5% tax on downloaded games, items

by Alexander Sliwinski { Feb 26th 2009 at 12:50PM }

Wisconsin will implement a 5 percent sales tax on "digital goods" starting October 1, reports The Spectator. The tax is expected to raise $10.9 million over the next two years; meanwhile, the state currently has a $6 billion budget deficit. That's like trying to melt an iceberg by licking it.

The tax will affect music, movies, digital books, ringtones, games and DLC -- no mention of porn (but that's streamed now anyway, not really "downloaded"). Wisconsin isn't pure evil, though, it did begin offering a 25 percent tax break to game developers last year. You take the good, you take the bad, you take them both and there you have: the facts of life.

[Via GamePolitics; image credit: cdw9]

Tags: big-fight, jim-doyle, tax, wisconsin

Reader Comments (Page 1 of 2)

Abobo @ Feb 26th 2009 12:56PM

This sucks for Wisconsinites, don'tcha-know.

Turd Ferguson @ Feb 26th 2009 12:58PM

don'tcha-know, bobbo

superklye @ Feb 26th 2009 1:40PM

We're Wisconsin, not Minnesota.

Dick.

Negativecool @ Feb 26th 2009 3:23PM

Milwaukee hurr...

Doyle is an incompetent fuck-up. Once Wisconsin politicians become elected here they instantly become infatuated with spending more money on useless shite than they can tax-- regardless of Wisconsin being one of the most highly taxed states of the union already. Next thing ya know they'll start taxing us to visit Joystiq...

Did I mention how much I hate that heat stick Jim Doyle?

Xizer @ Feb 26th 2009 4:17PM

Don'tcha know? Are you from Alaska or something buddy?

Markez @ Feb 26th 2009 4:21PM

Nice try, Kyle, it's still Sconnie.

Dirk Dorkelson @ Feb 26th 2009 6:04PM

@Negativecool,

Yeah, and you have some of the best schools and public services in the country, too. Funny how that works.

Dave @ Feb 26th 2009 9:59PM

Dirk:

http://www.census.gov/govs/statetax/05staxrank.html
http://www.statestats.com/edrank.htm

Of the top 10 highest taxed states (by capita), only 4 of them are in the top 10 school ranking

Hell, California brings in nearly twice as much tax revenue as New York in total taxes, (the #1 and #2 highest taxed states, respectively) and New York's education is placed at #16th. California? #47.

There is no direct correlation between higher taxes and better education or services. As a person who lives in California, a state that BY ITSELF is the 9th largest economy on the planet, and is ranked #10 in highest taxes by capita in the US, I can safely say that tax rate has nothing to do with quality of life.

If you elect a bunch of morons, the tax rate will go up because they don't know how to manage their funds. If you elect financially saavy people like businessmen and former successful CEOs, the tax rate will go down because they know how to properly manage money.

PROTIP: Throwing money at a problem doesn't make it go away.

Dirk Dorkelson @ Feb 28th 2009 3:21AM

I believe I said schools and social services, and California has some decent social services. Also, California is a bit of a special case because of Prop. 13. What's more, in looking at that list I don't see Wisconsin in the top 10 states as far as taxation, either. So the OP was wrong.

Put it this way, look at the list of the most taxed states and then the least taxed states. Generally, which ones would you rather live in? That's all I'm really trying to say.

CannabisPrime @ Feb 26th 2009 12:59PM

I wonder how/if this affects the 360's DLC. Since you aren't actually giving money for DLC, you're using points that you bought seperately.

Courtney @ Feb 26th 2009 1:03PM

I wonder if that's one of the reasons MS opted for points in the first place, in case a situation like this arose.

Now the question is, will there be online retailers who simply choose not to sell in Wisconsin, so as to avoid having to implement a system to collect this tax?

shannon @ Feb 26th 2009 1:48PM

online retailers only have to collect tax from buyers if the retailer has a physical location in that state. if the online retailer does not have a physical location in wisconsin, the retailer does not have to collect sales tax from buyers that live in wisconsin. the buyer is required to fill out a use tax form and pay the appropriate amount of tax that they should have been charged. technically speaking, if you purchase a lamp from your neighbor's yard sale, you're supposed to fill out one of these forms and send in the appropriate tax payment. in other words, i don't think you will see any difference in which retailers will sell their goods to residents of wisconsin.

Bailers @ Feb 26th 2009 3:27PM

Since you presumably bought the card from a store, the points wouldn't be subject to additional tax. If you bought the card online, then you will likely have to pay tax at time of purchase, but not again.

You'd hope.

CannabisPrime @ Feb 26th 2009 12:59PM

Ohhhh crap.

b1gsl1ck @ Feb 26th 2009 1:00PM

Good ol' Wisconsin, my home for 21 years, somehow overwrought with democrats. I suppose Wisconsin will soon be the state with the highest level of piracy. Oh well - Go PACK!

JerJer @ Feb 26th 2009 1:02PM

haha a 6 billion dollar deficit. the idea of a deficit/surplus is not a good or bad thing.

you need to ask why they have the deficit. maybe they are investing in schools which is a good deficit, etc. (same goes for the feds, a deficit is NOT necessarily bad)

maybe that measly 10 million is covering their BAD deficit. you know, the one where they hire a thousand fat strippers to their parties and used state money? that's a bad deficit.

JB87 @ Feb 26th 2009 3:18PM

So I can spend money I don't have, as long as it's for a cause I deem worthy? SWEET!

JerJer @ Feb 26th 2009 5:30PM

lol yes. you do have my permission to take the point entirely out of context.

Kirby Forsythe @ Feb 26th 2009 1:03PM

Sure, they offered the tax break for video game developers, but Doyle's wanting to cut the film tax breaks... So who knows how long the video game one would really end up lasting... And 9 god damn inches of snow tonight...

iFester @ Feb 26th 2009 1:04PM

Do you all pay tax when you buy point cards or off the marketplace? I pay 13% tax in Ontario when I buy them be it online or at a store. So I see it as tax for my DLC. If however they implemented something like that on individual purchases on top of what I currently pay I think I'd search for a new hobby.

Eric Adams @ Feb 26th 2009 1:04PM

That is a good point. The people that bought point cards from a store, paid sales tax; then now have to pay additional tax to get the game? that's like getting two different stinks on your hang-down and catching a disease from one of them....well maybe not that bad.

Jason @ Feb 26th 2009 2:39PM

You get taxed 3 times.

#1. Tax for the game
#2. Tax for the Microsoft Points card
#3. Tax for the DLC

I put tax for the game on the list because I feel that if you pay for tax on a game, there should be no more tax on that product after that, there should be no DLC tax.

Mike @ Feb 26th 2009 3:08PM

Who the heck buys points cards unless they're on sale?

meist3r @ Feb 26th 2009 1:05PM

How will that apply to anyone not hosting in Wisconsin? How do they distinguish between content purchased online from that which isn't sold in Wisconsin? How would that work?

In A World (XBL) @ Feb 26th 2009 6:36PM

They tax the person making the purchase, not the seller, just like normal retail.

Miku @ Feb 26th 2009 1:06PM

Seems better than the 12 cent per gallon gas tax they were trying to pass here in California. If I lived in Wisconsin I wouldn't be too upset. I mean, I have an extra 5 cents lying around most of the time.

pandlcg @ Feb 26th 2009 6:25PM

For a while Wisconsin had a gas tax that increased $0.01 every year regardless or whether they needed the money. It just automatically increased, they didn't even have to re-vote on it each year. They finally repealed it but kept the 19cents or whatever in there permanently.

(not sure if it was all of Wisconsin or just Milwaukee)

Benjamin Heckendorn @ Feb 26th 2009 1:15PM

LAME!!!

I like Wisconsin and all, but the Dirty Dome really needs a good flushing. (slang for our state capital)

Or... heaven forbid... SPENDING CUTS!

In A World (XBL) @ Feb 26th 2009 6:39PM

Or heaven forbid raising taxes on Billionaires!

mewoks @ Feb 26th 2009 1:15PM

I'm all kinds of confused.

When I buy DLC off of PSN, I get charged sales tax already. Rock Band tracks always come out to $2.13.

If I buy prepaid cards for PSN, I never get charged tax for the cards, just when I download something.

XBLA Points on the other hand confuse me even more. I got charged tax for buying a 1600 point card at Target, but didn't get charged tax for buying a 1600 point card at Best Buy...both stores in the same city. Obviously, since they are "points" and not USD, I never get charged tax when I actually download things from the store.

Deezul @ Feb 26th 2009 1:22PM

I have the opposite issue. No tax at Target, tax at Best Buy. But at BB, it's only on the 360 branded point cards. If i go buy the Zune Marketplace $15 or $25 cards, no tax. No tax on SiriusXM cards either.

Rhamsey @ Feb 26th 2009 1:16PM

oh crap, ny is next for sure.

avan @ Feb 26th 2009 1:16PM

porn comment again

Deck @ Feb 26th 2009 1:34PM

Love the photo! Haha, great!

The Dark Wayne @ Feb 26th 2009 2:17PM

I for one am certainly amused

Chipnut @ Feb 26th 2009 1:37PM

This doesn't just mean points, steam and all the other Download-able merchandise. As some one who lives and goes to school in Wisconsin i can say this is a drop in the bucket. My school just got a major budget cut, bedsides it's nothing more then the states 5.15% sales tax for physical goods in digital form. It's not like it bad, 5cents to the dollar is hardly a drain. And knowing my state will have just a little more income is not a bad thing.

FYI: Don'cha know, is a northern Minnesota thing, Wisconsin you'll heard a lot of "OH YAH".

Miyabroto @ Feb 26th 2009 1:52PM

Nice Facts of Life reference. Brings back memories of my childhood crush on Blair. She reminded me of Princess Peach... man, have I got problems.

Mark @ Feb 26th 2009 1:59PM

Yeah, they'll need the tax credit for development, because now they're going to have to re-write all the back-end purchasing software to ensure that Wisconsin residents pay tax and others don't. This is going to have a lot of problems.

Clayton @ Feb 26th 2009 1:59PM

This is bad news, as I am a resident of Wisconsin. So will we have to pay more upfront for DLC, like for example, The Lost and Damned DLC. I already bought it, but I'm just saying. Will it cost 1680 MS points here in wisconsin, or will it stay at 1600 MS Points?

Mark @ Feb 26th 2009 2:01PM

For that matter, how can they even enforce this? They don't have jurisdiction to force the selling entities to implement a collection unless they have a presence in Wisconsin. So will this be like a use tax? If it is, are they going to hire 10,000 auditors to follow up with all the people that won't actually report it?

justin @ Feb 26th 2009 2:07PM

if you want less of something.... tax it.

Ryan LN @ Feb 26th 2009 3:02PM

Will this work like the tax that us Ohioans are supposed to be paying on goods purchased from Amazon, ebay, and all other online merchants that we buy online? If so, I figure that Wisconsin will collect nowhere near the $10 mil they think they could collect and will come far closer to the $235 that I spent on pizza and Diet Dr. Pepper last year. While tax law ain't my specialty, the question that the above poster posed above is legit: who is going to collect this? The deeper, more trouble issue in my mind is that most lawmakers don't have an original bone in their body, and we'll see copycat legislation pop up like so many mushrooms on cowshit throughout the country, and it won't be long before someone figures out how to make it work and puts a harsh on our gaming mellow.