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Digital Download Tax Proposed In New York

by Mike Godfrey, for LawAndTax-News.com, Washington

22 December 2008


Governor of New York, David A. Paterson, has unveiled budget plans which could see the introduction of a tax on digital downloads, it has been revealed.

If approved, the proposals - which include a total of 39 tax changes - would see the implementation of a sales tax on downloads of digital media such as songs and albums, movies, photographs and games.

The tax would be applicable to all purchases of electronically delivered entertainment services, and would not, the Governor claims, exclude movie theatres or sporting events.

Paterson's proposals are part of budget plans aimed at raising around USD15.4bn to eliminate the current deficit, and also include proposals to:

  • Increase the current 34 cent levy on cigars to 50 cents;
  • Cut the all-year-round sales tax break on clothes and shoes worth USD110 or less, to just 2 weeks a year;
  • Increase the taxes levied on alcoholic beverages, and bring in an 18% tax on all drinks that are considered "non-nutritional";
  • Raise taxes on cars worth more than USD60,000, aircraft costing more than USD500,000, yachts valued at USD200,000 or more and jewellery and furs worth over USD20,000 by 5%.

Whilst there has been some initial objection to the Governor's proposals, Paterson has defended his plans, explaining that the declining economic conditions at present require tougher action, stating:

"We're going to have to take some extreme measures."


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