Lawmakers in New Jersey and Wisconsin are considering taxing online music downloads with a state tax. Nicknamed the "iPod tax," it would be collected on purchases of any digital content. Wisconsin Gov. Jim Doyle has already proposed the tax in his state, though some members of the legislature are already saying they will block the proposal. "It's an issue of tax equity," said Jessica Iverson, a spokeswoman for the Wisconsin Department of Revenue, told CNet.com. "If you go into a Main Street business and purchase a CD, you are paying tax."

In New Jersey, a new budget proposal also adds digital downloads as a taxable item. According to NJ.com, music downloads would carry a six cent tax. For example, 99 cent iTunes downloads would be $1.05.

Apple does address the issue of sales tax in its iTunes Terms Of Sale. According to their terms, "purchases will include sales tax based on the bill-to address and the sales tax rate in effect at the time of download." Additionally, Apple says it "will only charge tax in states where music downloads are taxable. No customers are eligible for tax exemptions for purchases made on the iTunes Music Store."

In some states, consumers may technically be breaking the law already by not paying taxes on downloads. South Dakota and Utah have such a law, though neither state tracks down the handful of dollars that go uncollected.

Wisconsin state Rep. Scott Jensen tells CNet that if the law is passed, it would likely go unenforced, like in the other states. Jensen is one of the lawmakers fighting against the bill.