Sales taxing downloads in Tennessee. Apple does it, Amazon doesn’t

The last thing I want to blog about is sales tax, however, there’s a lot of confusion being twittered and blogged around the Nashvilleosphere today about a “technical correction” measure that is working its way through the Tennessee state legislature. According to the Nashville law firm Waller Lansden, the measure would “subject downloaded sales of digital media, including music videos, motion pictures, news and entertainment programs, music, ringtones, electronic books, etc. to the retail sales tax.” In an advisory issued yesterday, the law firm claimed that, “under current law digitally delivered goods are not taxable unless delivered in a tangible form.” (I’m curious about the caveat as I’m perplexed with the “brain-teaser” about how something could be delivered in bits but be received in atoms. But that’s more a physics than a legal question. Perhaps that refers to ordering a print-on-demand book that is printed and then shipped, but that falls outside my understanding of what a “download” is or, for that matter, the meaning of the term “digitally delivered.”)

That “new tax” interpretation was quickly pounced upon by the state GOP’s Bill Hobbs and echo-chambered by Instapundit.

Wait a minute, some bloggers said — we’re already being charged sales tax on iTunes purchases. As tracked by Christian Grantham at Nashville is Talking and by A.C. Kleinheider at, sure enough, digital downloads purchased through the iTunes Store are already being treated as if they are subject to the state’s sales tax — thus placing in doubt the claim that the “tax” being legislated is new.

Here’s where I could wear my small business owner hat and launch into some history of my first-hand education on the concept of “nexus” but I’ll skip that one and say, simply, because there’s an Apple Store in Nashville and Memphis, the iTunes Store is collecting sales tax on purchases made through that channel. On the other hand, does not charge for sales tax on physical or digital products purchased via because it doesn’t have any direct operations here. (Yet another reason to purchase MP3 downloads via

I’m not a lawyer, and for that I’m quite thankful. However, I think the bloggers who are suggesting this is not a new tax may be confused. I know I am.

Who knows? Maybe it’s Apple that’s confused.