NY State Considers DLC Tax

Downloadable content for games, music, movies and more will come with a local and state sales tax in the state of New York if a proposed state budget is passed.

Responding to the dire economic times, New York governor David Paterson has proposed a revised state budget which would ease the burden on state and local governments by cutting jobs and services and raising taxes, including an "iPod tax" that would require downloadable content to be subject to the same taxes as anything purchased at a regular brick-and-mortar shop.

The budget document proposes to close the digital property taxation loophole by imposing "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."

Paterson's budget also calls for a reduction in school aid and layoffs for 521 state workers, among other things. "We're going to have to take some extreme measures," Paterson said. "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."

That aside, Paterson's rationale for arguing for the DLC tax is to close a loophole and "achieve tax parity."

(Report Via The Escapist)