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New York State Considers Download Tax

New York state governor David Paterson is proposing a new tax on downloadable content, in order to cover a $15.4 billion budget gap. The proposal specifically mentions imposing state and local sales tax on video games, amongst other downloadable content.
New York state governor David Paterson is considering a new tax on downloadable content, in order to cover a $15.4 billion budget gap. As reported by the New York Daily News, Democrat Paterson is proposing 88 new fees, including taxes on the sale of downloadable music and other "digitally delivered entertainment services." The proposal still needs legislative approval and has been suggested as a means to avoid broader income tax increases. Paterson has insisted that the new taxes are necessary in order to cover a shortfall from tax income usually collected from Wall Street companies hit by the global economic downturn. "We're going to have to take some extreme measures," he said to reporters. As discovered by website GamePolitics, the budget document specifically refers to video games in its description of transactions affected by what it refers to as the closing of the "digital property taxation loophole." According to the document, the proposal would impose "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 to achieve tax parity." "For example, with the passage of this bill, a book, song, album, or movie would be subject to sales tax no matter if it was bought at a brick and mortar store or downloaded online," continues the budget document.

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