Two Tax Tales

Most companies in US avoid federal income taxes

Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

And:

States may tax iTunes, other digital downloads

If you enjoy buying music from iTunes, movies from Amazon.com's Unbox, or computer software from anywhere, be warned: the halcyon days of tax-free digital purchases may be over.

With retail e-commerce sales now estimated to exceed $130 billion a year, and iTunes song purchases topping 5 billion, state politicians and tax collectors have begun to levy new fees on digital downloads.

Call it the iTax. In 2008 alone, at least nine states have considered digital download taxes, and at least five of those states have enacted them into law. Nebraska's governor signed a digital download tax bill into law in April, and a similar measure was adopted in Tennessee in June. As CNET News reported a few months ago, Indiana, South Dakota, and Utah also enacted digital download taxes this year.

All because we let this happen.