Real taxes on virtual products
New York State legislators are discussing whether or not to accept Governor Paterson’s proposal to tax many different types of entertainment as part of his efforts to raise money. The New York Daily News seems to have been first with the story, describing the budget as “a host” of new fees and small taxes in lieu of income tax increases. MMOs, Sirius XM radio, Rhapsody subscriptions and just about everything else you do for fun are covered.
To quote the Executive Briefing itself, the Governor’s recommendations include what is becoming known as “the iPod tax” – in government-speak, “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.” The Governor euphemistically says this will “close the digital property taxation loophole.” He also wants to tax “entertainment-related consumer spending, including but not limited to, movie theaters and sporting events” and “television and radio services provided by cable, satellite or other similar means.” You can read the entire budget presentation here.