Will New York Tax Virtual Goods?

New York State FlagEarlier this month, there was discussion regarding the taxation of virtual assets in China. Unexpectedly, however, similar discussions have recently been happening in the US.

Apparently, there is a “gap” in the New York state budget, and in response to this, Governor David Patterson proposed a number of solutions. Most interesting of them all was the one dubbed the “iPod tax” that would impose both state and local taxes on “digitally delivered entertainment services.”

Essentially, this means that any and all downloadable content could be affected. This includes all major video game platforms, and could also possibly encompass virtual goods and currencies. It’s not clear what exactly will happen, but GamePolitics.com says:

“If you live in the state of New York, you could find yourself paying sales tax on downloadable content (DLC) for video games, beginning in 2009.

That’s because, much like the private sector, state and local governments have been hit hard by the current recession. In New York, Gov. David Paterson (D) has responded by proposing a budget that calls for layoffs, service cutbacks and new taxes, including one that will likely add to the cost of your DLC on Xbox 360, PS3, Wii or PC.”

Of course, this is all just speculation at the moment. The budget will still have to be approved by the legislature, but regardless of whether it passes or not, it is interesting to see this sort of suggestion appear at all.

[via Virtual Goods News]