Snapchat, the image messaging platform founded in 2011, was valued at USD$40 billion in early March after a record-breaking IPO – making it more valuable than Delta, Target, and CBS.
These eye-watering figures are yet another example of how the sale, download, use, and sharing of digital imagery, music, and video is now big business. According to IBM we create 2.5 quintillion bytes of data every day. The sources of this data boom are everywhere online with all major social media sites depending heavily on user-generated images and videos.
Since the dawn of 2017 there has been a flurry of activity around online sales taxes in the U.S.
International digital service providers need to be aware of this as the potential domino effect of legislative change in the U.S. will have a major impact on business models.
States are now seeking ways to introduce and apply online sales tax legislation. To date the focus has been on how to tax out of state US ecommerce businesses.
There have been some interesting US digital tax developments of late, with the common driving force being the amount of potential revenue going unclaimed by tax jurisdictions.
In late October 2015 Chicago officially rubber-stamped their new amusement tax (commonly referred to as a ‘Netflix Tax’ and in operation since July 1, 2015), while both the city of New York and the State of Georgia have received budgetary advice on the need to tax digital services.
New product features offer a single integration for international digital tax compliance. Co. Kerry, Ireland: October 7, 2015 – Delivering on its promise to support digital merchants wherever they sell, Taxamo, a global digital tax solution, has expanded its flagship support for EU VAT and launched support for U.S. Sales Tax & Japanese Consumption Tax (JCT).
Tax on digital sales was introduced in some U.S. States as far back as 2003 and on October 1, 2015, Japan became the 36th country to introduce new ‘place of supply’ tax rules.
A new fiscal brief from New York’s Independent Budget Office (IBO) has urged officials to explore a New York digital tax.
The IBO is a publicly-funded agency that provides non-partisan information about New York City’s budget to the public and their elected officials. In its September fiscal brief (available here) the IBO stated that New York is foregoing significant revenue from the lack of a tax on digital services.