NJ to start charging iTunes tax this Sunday (October 1st) - Macenstein

NJ to start charging iTunes tax this Sunday (October 1st)

Posted by Dr. Macenstein

Plagued by a $4.5 billion budget deficit that briefly closed down the state’s government, New Jersey Governor Jon Corzine passed legislation this July that raised the New Jersey sales tax from 6% to 7% on all taxable items. But apparently that wasn’t good enough.

Today Governor Corzine announced that he has expanded the list of taxable items for New Jersey residents, and starting Sunday (October 1st) that list now includes iTunes downloads.

The official list of newly taxable items is as follows:

• Downloaded music and video
• Shipping and handling charges
• Flooring and carpeting installation
• Storage space
• Tanning, massage and tattooing
• Data processing
• Limousines
• Health, shopping and other club membership fees
• Parking garages and lots
• Non-clothing cleaning services
• Landscaping
• Magazines and periodicals
• Investigation and security services, such as security alarms and armored cars

That’s right, all music and video purchased via the iTunes music store (and any online service) will now be taxed at the same 7% rate that retail DVDs and CDs are. As a resident of NJ, I feel this both blows AND sucks. While in my mind I cannot justify any reason why a music download should NOT be taxed and a physical CD SHOULD (other than the state of NJ has absolutely NOTHING to do with the sale of iTunes songs), it still feels wrong. I am not sure exactly how well Apple and the NJ government will be checking on the downloads, but I, for one, will be “moving� to Virginia, or NY, or someplace without the taxes. At least as far as my iTunes profile is concerned.

35 Responses to “NJ to start charging iTunes tax this Sunday (October 1st)”
  1. Way Cool Jr. says:

    Would that work, just changing your address in your profile?
    I guess so long as you aren’t ordering any physical items you need shipped to you via the Apple store and using your Apple ID, it would work. Right?

  2. e:leaf says:

    I would imagine that the address that is verified is that of your credit card or Paypal account. So unless you can change the address on those accounts, you’ll be stuck.

  3. Anonymous says:

    It helps if your shipping address matches the billing address.

  4. Me says:

    Address that apple has must match the address that your bank has. Unless you use a prepaid credit card or something.

  5. Macgoog says:

    Politicians know how to do 2 things and do them well. Spend money that is not theirs and raise our taxes to cover their spending. Do the artist not pay taxes on profits from the song? Do the record companies not pay taxes on the song?
    Stop electing politicians into office! Don’t vote for any Democrats or Republicans! Vote for your neighbor! I don’t know about you but if the government shut down for the next 6 months I would never notice it.

  6. sam says:

    Would it more likely be checking your credit card billing address, not your iTunes profile address…

  7. Michael says:

    As an outraged resident of NJ, I toyed with the idea of changing my address too. Unfortunately, the profile address is the billing address tied to one’s credit card and, most likely, used for verification.

    Too bad the release date of the album I pre-ordered is October 3.

  8. Jason says:

    But it may look at your credit card as well. If that’s out of NJ, you could still be screwed.

  9. Pilky says:

    In all fairness it’s only 7%, which is a tiny amount of tax compared to somewhere like the UK which has VAT at 17.5%

  10. Mackid says:

    Re: Way Cool Jr.

    Won’t work .. you can’t change your Billing Address !

  11. NotInJersy says:

    Just drive to your next state and load up on iTunes card tax free. You don’t need a credit card on the iTunes store to use the iTunes card.

  12. perry says:

    In my county in maryland they charge a “fee” of $2 per month for cell phones. So get used to it.

  13. lseven says:

    Texas has always charged tax for iTunes. Probably other states, too. Better watch where you move to…

  14. Gerard says:

    >”In all fairness it’s only 7%, which is a tiny amount of tax compared to somewhere like the UK which has VAT at 17.5%”

    My understanding is that the 17% VAR covers all taxes collected from the public, at least most of it.
    In the US, not only do we pay the sales tax, we pay a property tax for our home, an income tax to the Federal, State and sometimes local government. We pay tax on my cell phone, land line, internet connection, cable TV and Satellite TV.
    All told in the US, an average working person pays about 40-50% of their income to taxes of one sort or another. The poor and rich pay a much lower percentage.

  15. Michigan User says:

    Some taxes are not fair…

    I go to the auto parts store and purchase a rebuilt water pump. The store needs my old pump back, so the store charges an additional $25 deposit plus sales tax. When I return my old water pump, the store refunds my deposit, but in Michigan, the store does not refund the sales tax that was charged on the $25 deposit.

  16. smiller says:

    sign up for paytrust and get a billing address in SD. Pretty fair place to do biz and a handy way to do both in/out bill pay.

  17. e:leaf says:

    Stop electing either Republicans (those who claim to love small government, but spend big) or Democrats (those who advertise big taxes and spending habits and live up to their promises) and vote Libertarian.

    If we all voted Libertarian, many of the problems that we face as a nation would be solved pretty quicky, and unecessary taxation and spending is at the top of the list.

  18. Josh says:

    Whatever your feelings on the tax… you are a criminal if you go around the tax. If you don’t like it then leave NJ. I am a NJ resident and I want the budget gap closed and I also buy iTunes music and am willing to pay the $0.07 if that will do that. If I don’t like it then I will move from NJ… and that’s my choice, but to change your address to NY is just wrong. You are responsible for the people that are elected as much as I am… unless you don’t vote.. in which case you are just plain dumb.

  19. C. Donna says:

    Some people, like a certain poster above, shouldn’t tell people to move from New Jersey if they don’t like the new tax. They should be telling the government officials involved in the budget problems to get the hell out of office…and maybe New Jersey. If NJ wasn’t so damn corrupt, specifically the government, then maybe the residents that fall in the poor to average income class wouldn’t be hurting so much. Yeah, it may be only 7%, but that’s yet ANOTHER tax being put on NJ residents to fix all the budget problems created by elected officials that I sure as hell didn’t put into office. New Jersey’s government is a mess and a shame. I have been a resident of New Jersey for almost 8 years and am, in fact, moving to New York. I’m glad to be leaving this state behind. There’s a reason why many people know of New Jersey as “the armpit of America.” I tried to give it a chance and looked at living here as a new, exciting experience, but the more time I spend here, the more I am ashamed to call it home.

  20. jsmith says:

    European countries with a VAT also have an income tax, generally with rates a little higher than ours but the top bracket starts a whole lot lower. I would guess the income tax burden is roughly equal for most European countries compared to an average state and federal income tax burden.

    I think the good doctor hit the nail on the head–why should a purchased CD be different from a song downloaded from iTMS?

    On the other hand, I’d be very upset were I a NJ voter getting screwed by the one percentage point sales tax increase for more money to be frittered away by politicians and then getting nickel-and-dimed by this and the other listed tax increases.

  21. Mark says:

    Voting libertarian would do several things – bankrupt public schools and do away with local fire departments, pubic libraries, road construction, environmental controls, the ability of governments to prosecute criminals, police and equipment for the police.

    Libertarianism is not so much a philosophy as a lack of one. Problems do not go away because one pays less taxes…man. Think a little about the complexity of the problem and the way the REAL world works and not some ‘ideal’ libertarian world. Society works when there is a sustainable middle. When we all give part of what we have to try and keep the majority of the population close in income. It is called the middle class. It is what separates us from third world countries. Libertarians would embrace most third world economies because nothing is redistributed from those who have the money/power/control over the society. Civilization asks us to be slightly more open minded and responsive to one another. Two groups who live in imaginary worlds – Scientologists and Libertarians.

  22. Anonymous says:

    Let’s not get into an argument about libertarianism. This isn’t a social philosophy class at community college.

  23. Podesta says:

    I happen to live in a state that does not have a sales tax. But, the simplistic notion that people in states that do should move to the few that don’t is laughable. The tax burden is not necessarily less in states without a sales tax. Services still have to be paid for and the costs are passed along in other ways.

    Macenstein should pay up. It is his civic duty.

    Amen to the people who have pointed out the libertarian ‘solution’ is delusional.

  24. Joel Ivory Johnson says:

    Well, we are kinda stuck with taxes being both necessary and undesirable, kind of like Dr. visits and car maintenance. Payment must be collected one way or another. There exists areas in which there is no sales tax but money is collected via toll roads. Or one can live in an area where the sales tax is low but the income tax is high.

    On the other hand, one unique attribute about this type of sales tax is that it only affeects the residents of an area. If you raise the sales tax in a major city then money is collected from both people that live there and non-residents that come to do business there. But with online taxes it only affects the people who claim an address within that area.

    I suppose it is natural to complain any time that taxes are raised though. Has any one ever rejoiced over paying more taxes? When all is said and done hopefully the result will be a change that will make a positive difference to many New Jersey residents.

  25. Amar says:

    What most people forget is that NJ has the lowest taxes for gasoline and no tax on food and clothing. Therefore we pay higher property taxes, it kind of equals out. States like Massachusetts do well with low taxes because they don’t have that many poor people, NJ might be one of the richest states, but cities like Camden and Newark need a lot more state help since property taxes don’t help enough in those cities.

    Until NJ realizes they can’t run local governments all off property taxes and spreads the taxes out on other items, we will continue paying the highest property taxes. Spreading the tax will also help the poor cities since that money can be spread out, currently local property taxes stay local.

    Another major problem is towns and cities that don’t integrate their services with nearby towns and cities and instead have their own departments with their own managers, etc… adding more useless employees to the payroll. Two towns that are next to each other and fairly small should only have one police force, not two with two captains, two secretaries, etc…

  26. TV says:

    Stop getting paper bills for your CC (only electronic statements for the that you use online)

    Change address to the Main PO in NY or something in iTunes and CC profile

    No Taxes for you…

    Been doing this for years for non-shipment purchases (or where they allow the shipping address to differ from mailing address)

  27. T says:

    According to some of these comments, you should, if you live in New Jersey, just bend over like a good little puppet, and take it because your politicians are too incompetent to run a state without going over the budget by 4.5 billion dollars? Way to acqueisce to whatever the .gov tries to do to you. After all, every single thing the state of New Jersey spends money on is so absolutley necessary it can only be paid for by the citizens of NJ, right?

    Want the budget shortfall fixed? Try electing people that aren’t pandering incompetent crooks instead of raising taxes. Take a good hard look at your state budget and ask why they can’t make some budget cuts. Don’t start screwing people out of more money and making sanctimonious speeches about how everybody needs to do more to cover some elected buffoon’s ass.

    Hell yeah you should avoid paying the tax if you can find a way around it. Keep letting them take your money and they’ll keep trying to take more of it.

  28. JB says:

    Funny …people actually believe more $$$ will fix anything.

  29. imacoonass01 says:

    Wow! If N.J. would stop spending those big bucks on thse big right turn loops, and spend a little less, to build a left turn lane with a light, they wouldn’t be in the predicament they are in.

    Btw, the going out of state and buying iTunes cards is the best idea yet (and legal!!!). Although we do not pay state tax where I live, I still do not believe that someone should have to “pay” for some politicians overspending/mismanagement. Maybe Governor Corzine should start saving money by cutting his and other state officials in HALF!!!

  30. adrian says:

    People still pay for music ?! ?!

  31. PD says:

    At least here in Colorado, we get to vote on and approve every tax increase!

  32. Brendan says:

    Didn’t we revolt from England over this same bullshit? This country has become the EXACT OPPOSITE of what our founding father (and mothers) intended it to be. Life liberty and the pursuit of happiness?? How, when they steal more and more from us every year. The boston tea party was a great idea that has come again. Every great civilization in history has eventually collapsed, and this nation is quickly on it’s way. Why don’t we let other people police the world and stop wasting BILLIONS A DAY and start worrying about our people here at home, not to mention sending our youth off to slaughter for political agenda. Thomas Jefferson said that to keep a government honest, the people should revolt every 10 years, we are what, 220 years overdue????

  33. MrsT says:


    Yes we did. When our representatives are acting in their own best interests and not in the people’s, it’s time to change things. I voted against Corzine and it seems I was right.

    Our elected leaders are starting to look more and more like the British governors in the original colonies.

  34. Ethan says:

    So far Brenden has made the most progressive comment.

    A revolt would probably even things out a bit. A big problem is that many Americans are not interested anymore in their civic political duties. Revolution would force people to give more thought and effort to their state’s issues. I’m not exadurating when I say that American citizens need to take more seriously their responsibility to replace corrupt or ill-functioning governments.

    If NJ’s situation with taxes is beyond repair by conventional political methods (as seemingly evidenced by multiple politician’s inability to make considerable progress with the issues) I’d say that the first thing to try is to organize a peaceful reconstruction of the state’s government; propose a new constitution that more appropriately addresses taxation, consider restructuring state offices in a way that reflects the modern needs of the people, etc. If for some reason the governor won’t consider it, it may be appropriate to rebel.

    A problem though is that our governments have put the people in a position that makes it difficult for us to consider rebellion. Although we are allowed to own and use firearms, they must be registered and they are discouraged. Something that would have to be considered is arming those involved, if the rebellion could not be accomplished peacefully. This might take a few years to do unnoticed. Further hindering rebellion is that the federal government would likely forget their place, and interfere (unless it could be done quickly enough). This would only cause a need to rebel against our federal government to remind them that they are not to be concerned with the formation of governments of the individual states.

    That would be a war we could not win.

    All in all it would take very capable military and political entities and leaders to ensure a successful revolution.

    I know these ideas may sound radical – they are. But they are reasonable. They may seem insane only because we have forgotten that they may be needed. I don’t live in NJ, and I don’t know the extent of the problems. What I explored was mostly hypothetical, so don’t be concerned if that would not be appropriate for NJ.

    On another note, there should be groups that stockpile weapons in preparation for something like this. Obviously they would need to be very discreet, so I don’t know if this is already happening some places. It is a need though.

  35. Raj says:

    It’s sooo easy. Either have an out-of-state relative (mom, dad, grandpa, grandma, sister…you get the idea) let you register on iTunes with their credit card & address (if they trust you, that is:-) — and you can download all you want sans the stupid tax. Or pay someone from out of state to purchase you an iTunes gift card — different registration than your current one.

    There are so many ways to get around this and similar insanities…just use your good old American resourcefulness ;_))

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