Can Washington [State] Charge Unauthorized Downloaders With Tax Evasion?

techdirt ^ | 6/3/9 | Mike Masnick

[Clint Williams]

A bunch of states have been pushing forward with plans to add taxes on digital downloads. The state of Washington apparently passed just such a law, which is scheduled to go into effect on July 26th. Nate sent in a note, pointing out that under a strict reading of the details of the bill you could see how the state could go after unauthorized downloaders as "tax evaders." Now, that may not be the case (and it would be great if we could get someone from the state to clarify), but it seems that what Nate is likely referring to is this explanation in the Q&A about the bill:

What is the value of the digital product for use tax purposes?

The value is the purchase price of the digital product. If the digital product is acquired by means other than a purchase, the value of the digital product is determined by the retail selling price of a similar digital product.

From that, you could easily conclude that anyone in Washington who downloads unauthorized files is now expected to pay a tax based on the "retail selling price" of the files. And, from there, it's not hard to see how failing to pay such a tax, could eventually be seen as tax evasion. How excited do you think that makes the RIAA? Remember, this is the same RIAA that suggested that the feds use copyright infringement laws to arrest drug dealers. You can check out the specific text (in Section 304) within the full bill (pdf file), which is basically the same as what's written above.

The feds eventually went after Al Capone on tax evasion charges. Are file sharers next?

71 Comments | Leave a Comment..

[driftdiver]

I think I want to start my own record company. Treat the customers nicely and I should be rich.

[sionnsar]

Say WA? Evergreen State ping

Quick link: WA State Board

FReepmail sionnsar if you want on or off this ping list.

Ping sionnsar if you see a Washington state related thread.

[Abathar]

Worked on Capone, so now they want to use it for a guy who uses Limewire to load up his Ipod with 30 year old classic rock songs found playing on the radio every day across the nation.

It’s all about the money, period.

[raybbr]

What is your opinion of Limewire? Is it safe to download vis-a-vis the PC?

[Abathar]

I’ve never had any problems with mp3 or video files I’ve downloaded, there are a lot of corrupted files so make sure if you use it to have a good AV installed on your machine.

Used it for years and never had a problem with it, common sense and automatic scans of everything you download before you open it and you will be fine.

[jwparkerjr]

If government, at every level, would put as much effort into finding ways to reduce spending as they do looking for ways to increase revenue their problem would be solved much sooner.

[raybbr]

Thanks for the reply.

[AnotherUnixGeek]

If government, at every level, would put as much effort into finding ways to reduce spending as they do looking for ways to increase revenue their problem would be solved much sooner.

Maybe those of us who support limited government should form a lobby. It's amazing how much influence the RIAA - a lobby that represents an obsolete, dying industry - has over Congress.

[RobRoy]

Question:

If I have a CD and want to put the songs on that CD on my iPod, but it is easier to download them off limewire, do I owe tax?

And more importantly, if I DON’T own the cd and download a 128k copy off limewire, is that taxable considering that all “for purchase” copies are higher quality than 128k?

This whole thing demonstrates why I, a resident of Washington state since 1966 (and born here in the mid-1950’s) am permanentaly moving to Kentucky. They can wallow in their liberal wasteland.

[Abathar]

Nope, I still have a stack of all my old vinyl albums stored in my barn for just that reason.

If you paid for it and have proof you did then you are covered.

[RobRoy]

I’ve been acquiring vinyl by the ton (literally) at garage sales over the last couple of years.

[sionnsar]

Interesting history on this one. Much opposition. http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2075

Voting Yea: Representatives Appleton, Blake, Carlyle, Chase, Clibborn, Cody, Condotta, Conway, Darneille, Dickerson, Dunshee, Eddy, Ericks, Finn, Flannigan, Haigh, Hasegawa, Hudgins, Hunt, Hunter, Jacks, Kagi, Kenney, Kessler, Kirby, Linville, Maxwell, McCoy, Miloscia, Moeller, Morrell, Morris, Nelson, O'Brien, Ormsby, Orwall, Pedersen, Pettigrew, Quall, Roberts, Rolfes, Santos, Seaquist, Sells, Simpson, Sullivan, Takko, Upthegrove, White, Williams, Wood, and Mr. Speaker
Voting Nay: Representatives Alexander, Anderson, Angel, Armstrong, Bailey, Campbell, Chandler, Cox, Crouse, Dammeier, DeBolt, Driscoll, Ericksen, Goodman, Grant-Herriot, Green, Haler, Herrera, Hinkle, Hope, Hurst, Johnson, Kelley, Klippert, Kretz, Kristiansen, Liias, McCune, Orcutt, Parker, Pearson, Priest, Probst, Roach, Rodne, Ross, Schmick, Shea, Short, Smith, Springer, Taylor, Van De Wege, Wallace, Walsh, and Warnick
Absent:
Excused:

Voting Yea: Senators Berkey, Brown, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Hobbs, Jacobsen, Jarrett, Kastama, Kauffman, Keiser, Kilmer, Kline, Kohl-Welles, Marr, McAuliffe, McDermott, Murray, Prentice, Pridemore, Ranker, Regala, Rockefeller, Shin, and Tom
Voting Nay: Senators Becker, Benton, Brandland, Carrell, Delvin, Hewitt, Holmquist, Honeyford, King, McCaslin, Morton, Oemig, Parlette, Pflug, Roach, Schoesler, Sheldon, Stevens, Swecker, and Zarelli
Absent:
Excused: Senator Hatfield

[mo]

Ya know where this is goin...a TAX EVADER will be identified and dealt with more aggressively than ANY TAX THIEF(Illegal alien)..perhaps even get pigeonholed as a “domestic terrorist”...

[pierrem15]

How about that Ubuntu Linux download? What do you think Microsoft thinks it's worth, and why didn't you pay the taxes?

The RIAA stuff is the camel's nose.

[Abathar]

"How about that Ubuntu Linux download? What do you think Microsoft thinks it's worth"

Excellent observation, I never thought of the value placed on "freeware" by the tax man.

[rockrr]

...unless of course they are dhimmicrats...;’}

[Robert357]

Sounds to me like free-ware and share-ware downloaders are desired to send in tax money to the state's as well.

For years the federal government has had a federal law that banned the taxing of the Internet. I think that cash hungry democrats at the State level have "found a work-a-round" a new source of potential money and and a plolitical blackmail thread.

I hope that the first case is not say Rush newsletters or priority service, or say some conservative Internet newsletter. It would not surprise me it that wasn't the first case as an object lesson of where the dictatorial power in this country now resides.

[Star Traveler]

You said — What is your opinion of Limewire? Is it safe to download vis-a-vis the PC?

—

Just seeing this now... :-)

Use a free BitTorrent client and use http://thepiratebay.org/ for a tracking site and to look up stuff...

It’s also a good way for you to distribute information, if you want to get it to FReepers, without having to have your own separate server somewhere, for hosting files or whatever...

We might need this for some things having to do with the Obama Administration... :-)