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NYC Prposes the Dreaded Digital Tax

In these trying economic times, businesses and government entities alike are pinching every penny while seeking as many revenue growing opportunities as possible.  In an effort to get a handle on his states economy, Governor David Paterson of New York has proposed a new budget that would include taxes on several different types of downloaded media, including music, movies and games.

While the popular street name for the move is the "iPod tax", the official name is the "Close Digital Property Taxation Loophole". The initiative plans to "Imposes state and local sales tax on purchases of prewritten software, digital audio, audio-visual and text files, digital photographs, games, and other electronically delivered entertainment services." This tax would likely affect the sales of downloadable content for video games, meaning New York residents may have to throw down some extra cash when getting the latest Rock Band tracks.

Other new taxes for the Empire State would affect movie tickets, taxi rides, soda, beer, wine, cigars and massages. It also extends sales taxes to cable and satellite TV services and removes the tax exemption for clothes costing less than $110. So, if you have virtually any vice known to man short of illegal narcotics, New York is looking to rain on your parade.

Taxes aside, Paterson and his $121 billion proposed budget are also looking to cut school aid by over 3%, fire over 500 state workers, shut down seven state agencies, and $3.5 billion in health care costs.

While these taxes won't affect anyone outside of New York, the proposed tax on downloadable content could set a dangerous precedent, allowing for other states to implement similar taxes. However, New York City mayor Michael Bloomberg is not a fan of the budget, claiming it could cost the city nearly $1 billion dollars total. Furthermore, many state conservatives believe that the new taxes would drive many New Yorkers to shop in New Jersey, where things like gas, spirits and soda have much lower taxes.

While many don't support new taxes, ever, it is important to keep the economy in mind. "This is where we are," Paterson told reporters. "Maybe we should have thought about this when we were depending on what we thought was inexhaustive collections of taxes from Wall Street -- and now those taxes have fallen off a cliff."

  • jwl3
    Democrats are the worst when it comes to tax and spend. And now we have one of them in office. There are repercussions to who you vote for. I hope that those idiots who voted for obama don't mind shelling out extra tax dollars. I don't want to hear a word of complaint from those turds.
    Reply
  • jwl3
    Patterson already passed the "Amazon" tax back in July. I used to order a ton of stuff online from Amazon, Buy.com, and Newegg. I cut back significantly. Newegg has since changed their policy to not collect taxes for deliveries to NY. I've been shopping them almost exclusively since July.
    Reply
  • gm0n3y
    @rocky,

    In Canada, virtually every physical purchase does get taxed. Its called GST (and many provinces have their PST as well). The government is mad that they're missing out on the digital content sales.
    Reply
  • JonnyDough
    After corporate tax, income tax, sales tax, inheritance tax, tolls, tariffs, retirement tax, excises (any tax per amount, gas tax for instance), environmental taxes, consumption tax, capital gains tax, and transfer tax I think we're being taxed e-f'n nuff.
    Reply
  • malveaux
    Here's a better idea.

    Cut just ONE suit from the popular club upstairs. We have too many of them that do nothing but skim the top anyways.

    Very best,
    Reply
  • WheelsOfConfusion
    So basically it's like a sales tax on content you buy through a service like iTunes or Amazon MP3s? I'm assuming it has some wording to distinguish between buying a digital copy of a movie and downloading Youtube videos to your /tmp folder.
    Reply
  • gm0n3y
    Downloading YouTube videos is free, so 10% of 0 is still 0.
    Reply
  • WheelsOfConfusion
    Good point.
    But what if I have a subscription to access protected content, like a newspaper's site, or a paper posted by a scientific journal? How would the wording of the proposal distinguish between getting a PDF of an article in Nature that's behind a subscription wall, and downloading music from a subscription service like Napster?
    Reply
  • kittle
    I wanna know how they are going to enforce this...
    If I live in NY and have a netflix subscription.. do my rates automaticly go up?
    if I live in another state and buy software from a NY-based company.. do i get taxed on that?

    howabout my steam subscription? .. are they going to tax me for downloading updates for a game I already paid for? (or a game I already paid my tax on?).

    110% BS
    Reply
  • gm0n3y
    @Wheels and Kittle

    They only tax you when you spend money (i.e. a sales tax), so if you have a subscription, you'll get taxed on that like anything else. If I pay $20/month for a gym membership, I don't pay tax every time I use the gym, just on the $20.

    As for enforcement, its up to the companies to collect taxes from their customers at the time of purchase, same as all other sales taxes.
    Reply