Assemblyman Charles Calderon argued that people who make or watch it should pays for its "harms." Happily, his proposal just died in committee. It does raise an interesting question though, since it could obviously only tax actual transactions: How many of you DO pay for porn? [The Blowfish Blog via Valleywag]

Massachusetts, Wyoming, and Washington are gearing up for their bills, just to name a few. It's actually kinda surprising it took this long for the taxes to start piling on. Most of the initial considerations about squashing a nascent market are nearly moot this point, in any case, with the digital market booming. I mean, when 30 percent of music revenues in the U.S. are digital, and the biggest music retailer in the world deals exclusively in digital content, you know the tax collector is going to be slinking close behind.

The one thing that might save us from being taxed is geography. States can only tax businesses that have a physical presence within their borders. Congress could change the law (and they probably will at some point), but in an election year, it's unlikely (one reason to be glad the circus is in town until November). It'll be interesting to see how this plays out—digital taxes seem like an inevitability, however. CNet points to NY as a bastion of tax-free sanity, but they're trying to squeeze Amazon right now, so it seems like a safe bet the money they could bring from taxing downloads will look pretty damn tangible. [Cnet]

The bill, dubbed the Mobile Wireless Tax Fairness Act of 2008, is a aisle-crossing affair, as it's co-sponsered by Senator Ron Wyden (D-OR) and Senator Olympia Snowe (R-ME). If the bill is passed, the taxes won't be lowered, they'l just be frozen in place for at least five years. Hey, I'll take it. These data plans are ridiculous enough without taxes making it even more expensive. Let's make this happen, Congress! [Ars Technica]

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New York-based retailers have argued for years that the Amazon loophole gives out-of-state online shopping centers an unfair advantage. Technically, consumers are supposed to report purchases they make online on their tax returns, but virtually nobody does it and enforcement is impossible.

The bill still needs a signature from Governor David Paterson to officially become law, but he's widely expected to OK it. The state government expects the new requirement to generate about $50 million in revenue this fiscal year.

Meanwhile, as a resident of this fair city who uses Amazon like her life depends on it, I get to watch my wallet empty 8.375 percent faster - in the middle of a recession! Thanks, government! [Internet News]

First and foremost you will need to get involved in a business that will qualify you for these types of deductions. Obviously that is easier said than done, and there is definitely a gray area with regard to what jobs will do the trick. Writing and music production were mentioned, but again, there will be other qualifying factors to contend with. But after that it is all sort of, kind of cake, baby! Hit the link for the rest of the tips. [Sound and Vision]

Download Page [Via Slickdeals]

So for this week's Franken, we've laid off the cool gadgets and cock jokes, instead stacking up the three best tax prep programs (TurboTax, TaxCut and TaxACT) to duke it out for our eternal affection/one-time use. Hit the jump for our Frankenreview from experts at Tax Software Review, CNET and About, and then share your best tax tips in the comments. Because my CPA's name is Gizmodo.

Ease of Use
"TurboTax doesn't explain what "Distributions" means, or if your W-2 automatically deducts, say, your 401(k) contributions to keep that money safe from taxes. The video explains things better, but not well enough for novices. 1
One of the strengths of TaxCut is that you don't need to have accounting experience of any kind. Simply answer the questions the program asks you. If you are unsure of an answer you can check the extensive Help section for guidance. TaxCut automatically checks your return for common errors 2

I was very surprised by the amount of time it took me to prepare a tax return using TaxCut Premium. In just 30 minutes, I prepared a fairly complex tax return, from start to finish. 3
A unique feature TaxACT 2006 Ultimate Bundle offers is that you can choose between answering tax questions or directly entering data into the forms to complete your returns...The state program is even easier to use than the federal, all the federal information is automatically transferred, then simply answer a few questions and run the alerts and you are done. 2

Features
TurboTax Deluxe offers every feature we looked for and includes some excellent compatibility options...[it also] reconfigures and recalculates entries instantly comparing different tax scenarios to help you maximize your return and plan for next year. TurboTax can evaluate your 401K contributions and estimate how much you can contribute before it affects your take home pay and so on....within seconds, you can evaluate all of your tax choices. 2

TaxCut Premium offers a comprehensive feature set that includes tax advice and a high level of compatibility with other products... The service also has many features for future planning, including a Retirement Savings Enhancer and Tax Planning reports. 2

[but]...we wished TaxCut Premium had a tool similar to TurboTax's Basis Pro, which uses Gainskeeper's historical data of stock prices to help you determine the cost basis of a stock or mutual fund. 1

... A feature we found missing in TaxCut is year-to-year deduction comparisons. 2

TaxCut failed to catch two mistakes when I input my W-2 data (I transposed numbers on my wages, and put a wrong figure for Social Security taxes). This is a fairly common data entry mistake, and TaxCut really should have kept this useful software feature. 3

[With TaxACT] investors can import capital gains transactions from GainsKeeper© and it has a handy "Life Events" feature. This feature can determine the future tax impact of life events such as marriage, adding children to your family, income adjustments, divorce, and more...[it also] includes most of the commonly used IRS tax forms and they guarantee their calculations. If fact, they will pay your penalties and interest if the software makes a calculation error. 2

[But] TaxACT Deluxe does not have a 401(k) Maximizer, a great tax planning tool I found inside the TurboTax software. 2

Support
TurboTax customers get free technical support by telephone, chat, and e-mail, which is a great deal. Intuit promises wait times of 10 minutes or less for phone queries—a promise that rang true in our tests. Support hours are Monday through Sunday, 8 a.m. to 5 p.m. Pacific Time—and that's better than TaxCut, which gives its tech reps the weekend off. 1

For support, TaxAct offers a well-organized, searchable knowledge base on its Web site. Support is free via e-mail and at an Iowa telephone number, and TaxAct guarantees a response within 48 hours. During tax season, January 10 to April 15, support is available weekdays from 8 a.m. to 9 p.m., Saturdays...and Sundays. 1

In Summary
TaxACT is highly recommended for people with relatively straightforward tax returns to prepare.... [and its] appealing price and premium features makes the software a top choice for many. 3

While no tax software is perfect, TaxCut did a thorough job of guiding us through the filing process. And if your overall goal is to save money up front, TaxCut's lower cost makes it an attractive alternative to Intuit TurboTax. 1

TurboTax Deluxe is the ultimate tax preparation product. This is the easiest product to use with one-button upgrades and thorough explanations of tax law changes 2"

Prices
TurboTax Delux w/State
$55
TaxCut Premium w/State
$40
TaxAct w/State
$16

WINNER: In my non-CPA eyes, I would go with either expensive (Turbotax) to deal with a complicated tax return, or inexpensive (TaxACT) if I just needed a barebones filing. But TaxCut, while well-rated, seems to neither be as cheap as TaxAct or functional/accurate as Turbotax.

And don't forget...we need your deduction tips. Otherwise I may actually have to purchase one of these programs. – Mark Wilson

Great Tax Software Chart [Tax Software Reviews]

108-Year-Old Phone Call Tax Repealed [I4U]