New York Gov proposes DLC tax

Wall Street is a lot more than just an evocative phrase used to represent the world's banking institutions. Turns out, it's an actual place in New York City where people work and companies do business. And thanks to the collapse of such highly lucrative New York-based companies as Lehman Brothers, AIG, and Merrill Lynch, the Empire State is in peril of seeing a well that contributes 20 percent to the state's budget dry up.

As spotted by Game Politics, The New York Daily News reports today that state governor David Paterson has laid out his office's budget proposal for 2009. To close the state's estimated $15.4 billion budget deficit ballooned by those financial institutions' implosion, the governor has called for a ranging array of new fees and taxes, with downloadable content for games squarely in the crosshairs.

According to the proposal, the sale of all "digitally delivered entertainment services" will be subject to state and local sales taxes. These services include "prewritten software, digital audio, audio-visual and text files, digital photographs, [and] games." [Emphasis added.] The budgetary measure also notes that "a book, song, album, or movie would be subject to sales tax no matter if it was bought at a brick-and-mortar store or downloaded online."

"This is where we are," Paterson said in a statement. "Maybe we should have thought about this when we were depending on what we thought was inexhaustive collections of taxes from Wall Street--and now those taxes have fallen off a cliff."

The Entertainment Software Association won't likely be the only one to take exception with the proposed budget measures. The governor's proposal also calls for taxes on such discretionary items as movie tickets, taxi rides, alcoholic beverages, and cable and satellite TV, and will reportedly lift the tax exemption on clothing that retails for less than $110. Paterson's budget also calls for a $698 million cut to school funding.