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What is the service? Musictoday's Digital Download service enables artists to offer audio and video downloads for sale directly through their official Web store.

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The tax man cometh after iTunes | CNET News.com

| Password: or Remember me | Search: States seek levies on digital-media downloads By and Staff Writers, CNET News.com April 13, 2006 4:00 AM PDT Internet shoppers accustomed to tax-free purchases from Apple Computer's iTunes Music Store soon may be in for an unpleasant surprise.

. Some such as California do not levy the same charge on iTunes downloads, but that could soon change.

. Others are doing it through the interpretation of previous law." Does my state tax digital downloads? While most states still only tax "tangible" online purchases, others are making exceptions for digital downloads, according to CNET News.com research.

. If your home state taxes digital downloads, those levies are generally collected either when purchases are made or on tax day, depending on the location of the Internet retailer.

. One reason that music and movie downloads have largely escaped the notice of tax collectors is that, until recently, the market was relatively small.

. That remarkable growth has prompted states like Kentucky to revisit their laws and impose new taxes on media downloads.

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