New York Considers "Ipod Tax"

by Jordan Yerman | December 17, 2008 at 12:31 pm

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New York State is considering a tax on entertainment downloads (known as the "iPod tax") to help offset its $15.4 billion deficit. State and local sales tax would be aplied for all "digitally delivered entertainment services".

Before anybody says anything, Jersey already taxes downloads.

$15.4 billion is a lot of Hoodoo Gurus downloads.

Under the plan, New York would charge state and local sales tax for "digitally delivered entertainment services," according to a story in The New York Daily News.

That includes e-books downloaded to Amazon's Kindle as well as for the digital songs obtained from Apple's iTunes. If the state legislature passes the governor's plan, the price of digital content for New Yorkers is sure to go up. The tax would also apply to sporting events, movie tickets, taxis, and satellite TV and radio.

Movie tickets, taxi rides, soda, beer, wine, cigars and massages would be taxed under Paterson's proposal. It also extends sales taxes to cable and satellite TV services and removes the tax exemption for clothes costing less than $110.

(That sales tax exemption was in place to prevent shoppers from doing the reverse bridge-and-tunnel for New Jersey shopping- surely this will hurt NY more than it will help because if people drive out to Jersey for some clothes shopping, surely they'll buy other stuff, too, like groceries, gasoline...)

"The governor is nickel-and-diming working class families," said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, an advocacy group.

California and Wisconsin considered similar proposals, but they were defeated. Tech industry groups like NetChoice, which counts eBay, AOL, and Yahoo as members, have been lobbying against the rise in so-called iTaxes.