I get taxed 7% in Summit County, Colorado; always have. How about a list of states that don't tax?

"New Jersey & You (minus your money). Purrfect Togetha.

Trenton makes, the world takes.

Could be worse.. they planned on taxing gas even more before.

I dont think this is going to last though, there are already rumblings of a court battle meaning likely this will be put on hold till the courts figure out the legality of it.

As of this moment, an online business must have a brick and mortar presence in a state for commerce to be taxable by that state. It's an interstate commerce issue that has been addressed by the U.S. supreme court. Have fun with your injunction, New jersey!

That'll teach you to support DRM and whores...

Ahh but thats the problem there Spiney... they DO have a Brick and Mortar presence, both in Apple Stores, and in a actual headquarters for development I believe (cant remember what the Edison building is used for)

The rub is that you cant buy music anywhere but online. NJ is saying since Apple owns it they can tax it, Everyone else is saying its a bit different when it comes to iTunes of which nothing is actually IN any state, its all data and never is a physical object ever.

This is of course not only about Apple, but anyone selling downloadable materials taxed by New Jersey. What this will likely do is drive businesses like Apple and particularly smaller electronic delivery firms out of New Jersey wherever possible, since the nexus (i.e. location) issue is an important one for U.S. sales tax purposes. (By the way, NJ's information flyer on this issue has not yet been updated to deal with the new rules.)

By the way, the EU has a value added tax provision that applies to all sales of downloadable materials to EU consumers, regardless of where the seller is located. Not many companies outside of Europe comply with this, but it is the law. {Prof. Jonathan}

Further on this, the actual NJ law is available for your perusal here. It defines "Digital Property" as "electronically delivered music, ringtones, movies, books, audio and video works and similar products, where the customer is granted a right or license to use, retain or make a copy of such item. Digital property does not include video programming services, including video on demand television services, and broadcasting services, including content to provide such services." The tax covers both producing and maintaining digital property.

There you have it, boys and girls. Forget iTunes; this covers a heck of a lot more! Think about Web development, online computer repairs and upgrades...I'm sure the taxation dept. in NJ will get very creative about this. {Prof. Jonathan}

The one that alarms me is that they're going to tax shipping and handling (probably a commerce clause suit there) and services that have traditionally been non-taxed (because they're services, not goods).

Think of the horrifying bonanza for the other 49 if Jersey gets to keep these taxes.

They wont, people dont like NJ, especially the federal government. Thats the only way you can explain the fact that NYC has a commuter tax on NJ residence, but when NJ tried the exact same thing, the Supreme Court ruled it illegal but still allowed NYC to keep it's tax when NJ brought them in on it.

We already pay taxes on iTunes downloads in Hawai'i. Always have. What's the big deal?

Prof J,

The brick and mortar presence in New Jersey is regretable for Apple and iTunes. What about Rhapsody with no presence? What about Napster? I think perhaps New Jersey is painting with too broad a brush and will find that injunction in their mailbox.

the picture of corzine makes me wonder...why can't HE just pay for everyone's downloads like he paid for his political career? it might even be cheaper!