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New York State proposes iPod tax

Want to download tunes to your iPod? You may have to pay a premium—at least in New York Gov. David Paterson, desperate for ways to narrow the projected (and ever-expanding) $15.4-billion budget deficit, yesterday proposed taxing just about anything he could to raise much-needed cash, including digital music downloads.

The so-called iPod tax was among  a long list of 88 new or increased fees that the governor proposed to fill in the gaping money hole. If adopted, which is iffy, consumers would pay a 4 percent sales tax on downloaded music and other "digitally delivered entertainment services," the Associated Press reports.

But New Yorkers' iPods aren't all that will be hit. Among other things targeted for new or hiked taxes: gasoline, taxi rides, cable and satellite TV service, cigars, beer, movie and sports tickets, and health spa visits. Paterson said his fiscal year 2009-10 budget proposal seeks to end a "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. For example, if lawmakers were to okay this version of the budget (which is unlikely), a book, song, CD, or DVD could be subject to sales tax no matter if it was bought at a brick and mortar store or downloaded online.

Image courtesy of Apple

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