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iPod tax approved by Iowa Senate

April 24, 2007

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A new bill approved by the Iowa Senate last Thursday, known as the “iPod tax”, will impose the state sales tax on the sale of digital downloads – including songs, cell phone ring tones, software, audio books and other electronic products.

Although the tax would be required, it would be collected on the honor system, meaning it would be up to consumers to send payment to the state, right after they finish loading their iPod with new tunes.

Backers of the move insist digital consumers should play by the same rules as shoppers at traditional stores who must pay sales tax on audio CDs and other items. The tax could bring in $4.8 million annually. But Sen. Jeff Angelo said the bill is proof that government will tax anything. “This tax is impractical. It’s unenforceable. And it’s highly unpopular,” Angelo said.

All 20 Senate Republicans voted no. Passage sends the bill to the House.

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