According to Gamepolitics, New York State has been hit hard by the economic crisis and is facing a $15.4 million budget gap. Gov. David Paterson (D) is responding to the hard times by cutting back services, laying off some workers, and (hurray!) excising new taxes. One of the 88 new fees being imposed is called the “ipod tax” because it taxes downloaded music and “digitally delivered entertainment services”, a term I found vaguely threatening when I first read it. What it actually means (if you bother to examine page 127 of the governor’s proposal (*.pdf)) is this:
“Close Digital Property Taxation Loophole. 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 to achieve tax parity.”
That’s right. State and local sales taxes are to be imposed on purchases of not just songs, but prewritten software and games, too. New Yorkers can expect to say goodbye to $.99 songs, tax-free DLC, and fun.
In some ways, this was inevitable. The freedom and ease with which people conduct business over the internet was begging to be taxed, regulated and ruined by the government. It was just a matter of time. Sigh.
When something goes horribly wrong in the States — like when NBC aired “Mama’s Boy” — we Americans have a habit of saying, “I’m moving to Canada”. This is one of those times. I would have written a “I’m moving to Canada” passage here, but Big Brother Canada taxes downloaded music already. There goes that option.
It should be noted that the governor’s budget is in the proposal stage and has not been passed yet. If it is accepted by the state legislature, it remains unclear exactly how high the fees would be or in what ways they would be imposed. However, the governor’s proposal claims that New York expects to generate $15 Million in revenue from this single tax in the 2009-10 fiscal year. If it works, other states will probably adopt similar programs, as most of them are in dire need of cash.
No word yet on whether or not Mexico taxes DLC. I’ll let you know when I get there.