Washington, like many states these days, is looking for ways to increase tax revenues. To that end it has just enacted legislation that will become effective July 26, 2009 clarifying how digital products are to be taxed in that state. Electronic downloads of music, movies, and other standard information have always been subject to sales and use tax. However, with the passage of ESHB 2075 all digital products, regardless of how they are accessed (downloaded, streamed, subscription service, networking, etc.) will be subject to sales and use tax.
Digital products that will be subject to sales or use tax include:
- Downloaded digital goods such as music and movies;
- Streamed digital goods;
- Automated digital services;
- Remote access software.
The Washington Department of Revenue has a web page which provides further explanation of the newly taxable products.