The App Economy: Good for Jobs, but Consumers Beware of App Taxes

There has been extraordinary growth in the number of mobile applications available for us to use these days. We’ve gone from just a few hundred thousand on the market three years ago, to more than two-and-a-half million app offerings today. That tremendous surge has made life a lot easier for us in a lot of different ways, and it’s also led to a significant increase in what a recent report calls the ‘app economy’. The App Developers Alliance and CTIA – The Wireless Association recently released the report, which looks at how the development of apps is creating new jobs in the United States. The main finding is that the app economy has created more than half a million jobs in the U.S. (519,000 to be exact). Not too shabby. The report also contains a lot of interesting state-specific economic impact information, so take a look and see what the app economy looks like in your state.

It’s wild to think that it has only been five years since iTunes and Android Marketplace application stores opened. Now we spend billions of dollars every year on downloads, and that number continues to grow.

That’s why I think it’s so important for you to know about the ‘Digital Goods and Services Tax Fairness Act’ that Congress is currently considering. Quite often, if not most of the time, you’re out and about when you’re buying an app on your mobile device. Many times you could be traveling. Whatever the situation, it’s possible you could be buying an app (or song, ringtone, etc.) in a different state than where your phone bill goes, and the app you’re downloading is produced by a company with headquarters in one state, but its server is another one. That would mean four different states have some hand in your purchase. Which one of them gets to tax you? The way the law currently reads, it’s actually possible that all four could. The ‘Digital Goods and Services Tax Fairness Act’ fixes that loophole, so I urge you to write your members of Congress and ask them to support it today.

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