New York governor wants to tax downloads

Governor Paterson of New York has announced he wants to introduce an ‘iTax’ on downloads. The tax is a value added tax and not a copyright levy. Currently, downloads are exempt from VAT since they are not ‘tangible goods’. With the proposal from Paterson this would change. The price of a song on iTunes would go from 99 dollarcents to 1.07 dollar.

Both the content industry and Apple (owner of iTunes) fear that the tax will hamper sales and drive consumers towards piracy. Consumers are not amused too and indeed some have already stated they will turn their backs on legal downloads when this tax is introduced. In 18 states there is already a tax on downloads, but New York will be the second state where this is codified in law.