How do digital services taxes work?
Digital services taxes (DSTs) are taxes levied on digital services provided by online and tech companies. These taxes are enacted in certain countries and regions to help offset the negative effects of digital services, such as the avoidance of taxation by companies that are not physically located in the area. In Utah, there are several different types of digital services taxes. The primary type in Utah is the Digital Goods and Services Tax (DGST), which is applicable to all digital services, such as streaming, downloads, or any service that is sold digitally. It is mainly concerned with consumer-facing digital services, such as streaming services and electronic stores. The DGST is collected from the consumer when the digital service is purchased. It is either collected directly or through its provider, who is responsible for the collection and remittance of the tax. The amount of the tax is based on the total amount of the purchase, and it is the same regardless of the location of the provider. In addition to the DGST, Utah also has a digital services tax for the sale of advertising services. This tax is assessed on the cost of the advertising, and it is collected from the advertiser, not the consumer. This tax is intended to help the state recuperate some of the revenue it has lost from the sale of digital services that have been avoided due to physical location. Overall, digital services taxes are taxes imposed on digital services sold in Utah. They are collected from the consumer or the advertiser, and they are intended to help recover some of the sales tax that has been avoided due to the physical location of the provider.
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