North Carolina mulling digital distribution tax

As digital distribution of entertainment becomes more common, the effects of its popularity are impacting more than just the people who buy and sell it. Now, state governments are looking into the practice as a way to bolster tax revenues.

News 14 Carolina is reporting that North Carolina legislators have established a commission to investigate the possibility of taxing online transactions, including those of digitally distributed products. The taxes would apply to all manner of purchased downloaded content, from music and movies to books and games.

The report claims that such taxes would bring in an estimated $12 million over the state's next fiscal year. Although substantial, that figure would need to be bolstered by a variety of other state taxes and spending cuts if North Carolina is to make up for a projected revenue shortfall of $2 billion.

New York Governor David Paterson proposed a similar tax for his state last month, whereas federal legislators considered taxing sales of in-game items and other virtual goods back in 2007.