No app for iTunes tax in Michigan — for now

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LANSING – iTax iTunes? Does Michigan have an app. for that? Not yet.

Michigan doesn't collect sales tax on such transactions, but Indiana and Wisconsin do, and the governor of Illinois considered it as a way to meet a budget shortfall before backing away from the idea.

Online services such as iTunes let people download music or videos from the Internet for about $1 a song or a few dollars for a video, which is usually charged to a credit card.

“I think one of the issues here is that there doesn't seem to be any will to do anything that involves money in terms of a new tax,” said David Zin, an economist with the Senate Fiscal Agency. The nonpartisan agency analyzes tax and budget issues for the Senate.

Judy Putnam, the communications director for the Michigan League for Human Services, said that although there probably isn't the necessary political support for new taxes, that attitude may change “as people come to realize how deep these cuts are going to be,” in the state budget.

Zin said that the idea of a tax on iTunes and other services has come up a couple of times.

“One of the issues we would have with a downloadable content tax is enforcement,” Zin said. “If I download a file from the Symantec website, and Symantec is out of California, the server is in Germany and I'm in Michigan, how do we find out that I owe sales tax on it and do I? Perhaps I owe use tax on it because I brought an untaxed item into the state and used it,” he said.

Michael LaFaive, the director of fiscal policy for the Mackinac Center for Public Policy in Midland. said that his free market-oriented think tank opposes any tax on downloads. “Just because something exists doesn't necessarily mean that a tax should be slapped on it,” he said.

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