In a change that may affect some merchants, Wisconsin is the latest state to require sales tax on digital downloads. These downloads may include music, books, ring tones and images. All merchants who include these types of products should consult their accountant and sales tax attorney to ensure they are in compliance. This new law took effect on October 1 2009. Legislators anticipate collecting between six and 11 million dollars. Wisconsin has a budget deficit of approximately six billion dollars.
Digital download tax is probably only the beginning. As we have seen over the past few months, many states are becoming more aggressive in questioning the activities of out of state merchants. The current definition of nexus in Wisconsin includes in state solicitors and other representatives. As always, every merchant should consult their accountant or sales and use tax attorney to verify they are in compliance. Remember, follow pending legislation is important, but you also need to be informed and in compliance with existing law.
As a result of new legislation passed in 2009, Wisconsin is also a new member of the Streamlined Sales and Use Tax Project.