State Government Officials Create Opportunities for Independent Artists

As CD’s are phased out, independent artists rely heavily on digital sales.  Digital sales allow independent artists to sell globally and now digital sales (with the help of state officials) are opening other doors for indie artists.  How? By taxing the hell out of major record labels.  Many states are pushing for taxes on digital products. In a recent article written by Anne Broache published on April 15, 2008 on CNET News.com, Broache writes:

“Two years ago, a CNET News.com special report found that 15 states and the District of Columbia said that their laws and regulations meant that digital downloads should be taxed. A few months later, New Jersey joined that list.

Since then, more states have become tax-inclined. In 2008 alone, Indiana, Utah, and South Dakota have enacted laws reiterating their commitments to collect taxes on digital downloads, while Nebraska recently voted to send its governor a bill (PDF) that would tax downloads of books, movies, and music starting October 1. Others, including Wisconsin and Massachusetts, have formed groups to “study” new i Tunes taxes.” (Politicians push for new iTunes sales taxes).

Although this sounds tedious it, puts more pressure on the entertainment industry and opens doors for Independent artists. Don’t thank your state government officials just yet. They did not do it for their native aspiring artists, nevertheless they have opened a door.

Right about now some of you are saying isn’t this bad for me? I sell my music on my web page and MySpace. Doesn’t this take money out of my pocket? NO!! If you sell you music on MySpace , Snocap is the one paying the taxes. For those who are unaware, Snocap is the company MySpace uses to allow users to sell their music on their MySpace page. What about your web page? More than likely you are using a company or other service such as cdbaby, e-junkie, amazon, or itunes to sell your music on your web page. Companies such as these are responsible for charging the digital tax.

So does this mean you will be charged more by the digital company you use to sell your music? No, it will be like a sales tax.  What do you think the tax will be on a .99 cent song? Around $.07, the same it would be on that .99 cent cup of coffee you just bought from the gas station.   We’re not breaking the bank here.

The greatest outcome of the proposed state tax is the financial hit to the major record labels. Record labels cannot afford to loose one dime ($.10) right now.  Sure they sell millions, however it does not compensate for the millions the spend on ad campaigns, upkeep of their artists, touring expenses, and the millions LOST from illegal downloads.  They can barely afford to pay for their star recording artists. Ironically, a .07 digital tax for a single .99 cent song is more than they give each artists per album sale!