Digital Download: Closing the Emerging Markets Digital Fair Share Gap

By Delegate Cliff Hayes Jr.

Chair, Communications, Technology & Innovation Committee Chair, Joint Commission on Technology & Science (JCOTS)

Virginia has always been a state that values innovation, responsibility, and fairness.  But as our economy continues to evolve, our tax code hasn’t kept pace.  Today, more and more wealth is being created in digital markets.  Yet, much of it falls outside the reach of laws written for a far more traditional economy.  I call this the Emerging Markets Digital Fair Share Gap.

For decades, our tax system has focused on the physical world: tangible goods, physical property, and storefronts.  However, economic value is no longer limited to what we can touch or hold.  Digital assets, cryptocurrency rewards, tokenized goods, and high-value online marketplaces have become major engines of growth.  These transactions generate real money, but many escape the structure designed to ensure fairness across all sectors of our economy.

Here’s the core issue:  when someone buys or sells a physical product, we know how to treat it under Virginia’s tax code.  However, when that same value moves digitally, especially through blockchain-based or tokenized markets, it often goes completely untaxed. That’s not innovation. That’s an imbalance that leaves traditional businesses and everyday taxpayers carrying more than their fair share.

This gap has real consequences. National models show that states modernizing their digital-asset frameworks can recover hundreds of millions to billions of dollars over time.  Even modest estimates for digital goods alone point to tens of millions of dollars annually.  These are funds that could support education, broadband, mental health services, public safety, and other vital needs across the Commonwealth.

Closing the Emerging Markets Digital Fair Share Gap isn’t about taxing everyday Virginians for downloading music or streaming shows.  It’s about ensuring that large-scale, high-value digital transactions contribute fairly, just as other sectors already do.  Modernization is about balance and not burden. As Virginia builds its future, our tax system must reflect the economy we live in, not the one we left behind.