Federal "Digital Goods and Services Tax Fairness Act" Would Reduce Revenue and Promote Tax Avoidance

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Dick Lavine /(512) 320-0222 x 101

June 22, 2012

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The proposed Federal Digital Goods and Services Tax Fairness Act of 2011 (“DGSTFA,” H.R. 1860/S.971) would limit state and local governments’ ability to levy taxes on downloaded music, movies and online services like photo storage and payroll processing. This would reduce the ability of Texas and its local governments to provide necessary public services. The revenue losses would grow as more types of entertainment, information, and business-to-business services use online technologies.