{"id":1170,"date":"2014-03-24T06:55:35","date_gmt":"2014-03-24T13:55:35","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1170"},"modified":"2014-03-24T06:55:35","modified_gmt":"2014-03-24T13:55:35","slug":"taxing-music-downloads","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/taxing-music-downloads\/","title":{"rendered":"Taxing Music Downloads"},"content":{"rendered":"

\"get<\/a>Europeans have been able to avoid high home-country tax rates on downloads of songs and books by purchasing through Luxembourg. The UK wants to put a stop to that. The Guardian reports<\/a>:<\/p>\n

George Osborne’s latest\u00a0budget\u00a0could spell an end to 99p song\u00a0downloads\u00a0by closing a tax loophole that meant consumers were paying VAT at very low foreign rates on online purchases of books, music and apps.<\/p>\n

The chancellor will bring in new laws making sure that internet downloads are taxed in the country where they are purchased, meaning web firms such as Amazon and Apple will have to charge the UK’s 20% rate of VAT. At the moment they are allowed to sell digital downloads through countries such as Luxembourg, where the tax rate is as low as 3%.<\/p>\n

In a little-noticed announcement, Osborne said he would used this year’s finance bill to impose the new law from 1 January 2015.<\/p>\n

The budget document said: “As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.”<\/p>\n

Official estimates suggest the move could raise an extra \u00a3300m for the Treasury. Online retailers could pass on those costs to consumers in the form of higher prices.<\/p><\/blockquote>\n

The policy is a good idea. Value-added taxes are a tax on consumption, not production, and as such purchases should be taxed according to the residence of the consumer, not the place where the sale actually transpired. (Note that in the US, retail sales taxes are meant to apply the same way – if I purchase a car in Montana, which has no sales tax, and bring it home to Indiana, I owe Indiana sales tax on that purchase). In practice this is sometimes difficult to apply. But with electronic purchases it should be possible (unlike applying it to someone who travels to another European country to purchase small, material goods). Applying the tax to consumers in their home countries will prevent race-to-the-bottom competition in low sales taxes for downloads, for which there is no compelling reason for differential tax treatment from material cd’s and books.<\/p>\n","protected":false},"excerpt":{"rendered":"

Europeans have been able to avoid high home-country tax rates on downloads of songs and books by purchasing through Luxembourg. The UK wants to put a stop to that. The Guardian reports: George Osborne’s latest\u00a0budget\u00a0could spell an end to 99p song\u00a0downloads\u00a0by closing a tax loophole that meant consumers were paying VAT at very low foreign […]<\/p>\n","protected":false},"author":3,"featured_media":1172,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1170","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/Luxembourg.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-iS","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":377,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/","url_meta":{"origin":1170,"position":0},"title":"Targets, The Cost of Bread, and Nonprofit Arts Pricing","author":"Michael Rushton","date":"February 25, 2013","format":false,"excerpt":"My previous post drew lessons for museum pricing from what we observe in the prices set by cable television providers. But how can for-profit pricing be relevant to nonprofit museums, to orchestras and opera? Don\u2019t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons,\u2026","rel":"","context":"With 5 comments","block_context":{"text":"With 5 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/#comments"},"img":{"alt_text":"Focus on the target","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/archersDM1304_468x364-300x233.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1222,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/04\/at-the-record-store\/","url_meta":{"origin":1170,"position":1},"title":"At the record store","author":"Michael Rushton","date":"April 15, 2014","format":false,"excerpt":"I used to love going to record stores when I was a teenager. I couldn't buy much - a back-of-the-envelope calculation tells me it would have taken me 3 or 4 hours of work at my Saturday job at the Oasis Car Wash (it's still there!) to afford one LP\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"I just called to say I love you","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/jack-black-high-fidelity.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/jack-black-high-fidelity.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/jack-black-high-fidelity.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/jack-black-high-fidelity.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":646,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/limiting-the-charitable-deduction\/","url_meta":{"origin":1170,"position":2},"title":"Limiting the charitable deduction","author":"Michael Rushton","date":"April 11, 2013","format":false,"excerpt":"As my blog-neighbor Lee Rosenbaum reports, the proposed 2014 budget from the White House would cap the tax benefit for charitable donations at 28%. In the U.S., where donations are deducted from the income tax base, the actual rate at which your donation is subsidized is your marginal tax rate,\u2026","rel":"","context":"With 1 comment","block_context":{"text":"With 1 comment","link":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/limiting-the-charitable-deduction\/#comments"},"img":{"alt_text":"marginal rates","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/1040of1913-219x300.gif?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3667,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/12\/on-indirect-support-for-the-arts\/","url_meta":{"origin":1170,"position":3},"title":"On “indirect” support for the arts","author":"Michael Rushton","date":"December 10, 2024","format":false,"excerpt":"Thomas Wolf has\u00a0posted a short piece\u00a0on the history of the National Endowment for the Arts, whether it is likely to survive the coming second Trump administration, and the tax deduction for charitable contributions. I\u2019m going to focus on that last bit\u2026 People who itemize their income tax deductions can claim\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/12\/image-3.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/12\/image-3.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/12\/image-3.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/12\/image-3.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":1533,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/09\/how-should-we-subsidize-charitable-giving-to-the-arts\/","url_meta":{"origin":1170,"position":4},"title":"How should we subsidize charitable giving to the arts?","author":"Michael Rushton","date":"September 22, 2014","format":false,"excerpt":"In the New York Times, Nicholas Kristof and Sheryl WuDunn write: Moms in poverty often live in stressful homes while juggling a thousand challenges, and they are disproportionately likely to be teenagers, without a partner to help out. A baby in such an environment is more likely to grow up\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"the state really ought to pay for this","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":387,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/why-is-dynamic-pricing-so-rarely-used\/","url_meta":{"origin":1170,"position":5},"title":"Why Is Dynamic Pricing So Rarely Used?","author":"Michael Rushton","date":"February 28, 2013","format":false,"excerpt":"As technology has come available that allows performing arts organizations to adjust prices in light of demand, the question has arisen: is it appropriate for nonprofit theaters to employ dynamic pricing? See here and here for example. 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