North Carolina mulling digital distribution tax

State lawmakers may demand a cut of games, books, music, and all other downloadable purchases.

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.

The North Carolina legislative building.

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.

85 Comments

  • xDaJuicex

    Posted Jan 30, 2009 8:35 am PT

    As a North Carolina resident, this is not pleasing news to hear. Try removing useless programs in government instead of taxing every aspect of our lives.

  • hannify

    Posted Jan 29, 2009 5:11 pm PT

    Doesn't affect me - heck, add 100% tax on for all i care

  • DepressionMoon

    Posted Jan 29, 2009 3:17 pm PT

    Damn, i didn't notice this until now. I don't think this is a good idea. I don't want to spend unnecessary money to supply more taxes for the government when I don't approve on some of the ways they've been handling the country so far. For an example refer to the FDA and the peanutbutter thing.

  • glhx1rush

    Posted Jan 29, 2009 1:44 pm PT

    Somebody's gotta pay for Hope and Change, may as well be us. Not.

  • zeniftan

    Posted Jan 29, 2009 1:27 pm PT

    I don't know if this would work, or if any of you trust anyone with your steam account and credit card details, (The only peaple I'd trust with my credit card details is my parents. Not even my girlfriend get's a look. I'm not a nerd, gay or a geek for trusting the people that brought me up.)but why not ask someone out of state to buy your game interest's for your on your account and THEN install steam in a month's time or something.

    Like I said though I don't know how this sort of thing work's plus I live in the UK so if this new tax law was going to come into effect with us it wouldn't just be one County/State, it'd the ENTIRE country. Stupid *** Politicians and there dumb scheme's to money grub for there own bank account.

  • necronaux

    Posted Jan 29, 2009 9:20 am PT

    Howabout we fire a few politicians? None of them are worth anywhere close to what they're getting paid (and they keep giving themselves raises, too).

  • otanikun

    Posted Jan 29, 2009 9:02 am PT

    Um...how about no? Money grubbing politicians, get your money elsewhere, what point do you have in taking a cut of the profits on something not even remotely associated with you?

  • coruscant

    Posted Jan 29, 2009 8:48 am PT

    This is just silly! It can't work, can it?

  • swamptick

    Posted Jan 29, 2009 8:27 am PT

    When will politicians, especially the left wing, understand that raising taxes has NEVER increased revenue in the long term. It is JOBS that create sustainable economic growth. It is COMPANIES that employ people thereby creating JOBS. It is JOBS that drive the American (and all other economies). When you create new taxes you drive companies out of business. Politicians who like to raise taxes are like dogs, they can't see past the moment towards long term effects. Politicians don't have the SLIGHTEST clue what economics is.

    This is a bad move. If North Carolina legislatures new so well how to run a state government then they would not be 2 billion dollars in the hole. It is their series of long running fiscal mistakes that have put them where they are. If this legislation passes it will just be another mistake that will ultimately put NC further in it's economic hole.

  • WardCleaver02

    Posted Jan 29, 2009 7:27 am PT

    Quiet. Anybody hear that? That is the sound of Epic Games and Red Storm Entertainment packing their bags.

  • nintendo-naut

    Posted Jan 29, 2009 7:18 am PT

    Retarded and unnecessary. Plain and simple.

  • FlashCharge

    Posted Jan 29, 2009 6:46 am PT

    Well, from bashing video games to taxing them what a turn around. We pay so many excise taxes as it is and where has the money gone. It just seems that the government is again running in circles trying to undo the mess they got this country into. If anyone thinks that government is the answer to our problems think again.

  • Obliterati

    Posted Jan 29, 2009 6:18 am PT

    Idiots. Even if they do pass a new tax, the courts will just strike it down. These legislators should try reading the Constitution - specifically Article II, Section 8. Or if that's too complicated, they can take a look at the Supreme Court decision Complete Auto Transit v Brady. A state's power to tax interstate commerce is EXTREMELY limited.

  • jayntampa

    Posted Jan 29, 2009 6:11 am PT

    Of course it should be taxed, just like any other item you buy. The real question should be whether the taxes should be incurred at the place of purchase (your home) or the location of seller.

    Anyway, taxes are important, if you don't realize that, then you need to work on your studies a bit more. This quote from Oliver Wendell Holmes, Jr., sums it up best: I like paying taxes. With them I buy civilization.

  • CarnageScream

    Posted Jan 29, 2009 6:08 am PT

    Bravo, I applaud your points.

  • DMBdrunkass420

    Posted Jan 29, 2009 6:01 am PT

    Yeah because a lack of Government oversight isn't what got us into this problem in the first place?! I don't like the Government having to spend what little money it has left over after defense on bailing out failing businesses any more than you do. But if those businesses are tied to thousands of job at a time when the Country is hemorrhaging jobs, well I don't mind that as much. Putting people to work is the only thing that will fix the economic problem, and the only way for the Government to put people to work is to spend money!

  • CarnageScream

    Posted Jan 29, 2009 5:55 am PT

    Your right the government is now in the banking industry and auto industry, and soon to be gaming industry cause they really know what there doing. The government is simply breath taking, they can't keep their hands out of our pockets. It will all be ok soon because the Chinese are coming they will save us. The system is broken and money won't fix it all.

  • DMBdrunkass420

    Posted Jan 29, 2009 5:46 am PT

    To the conservative who think taxes are the worst evil in the world WAKE UP they aren't! And for those who think the way out of this problem is tax breaks then i would direct you to the 1930's and FDR's New Deal...tax breaks didn't end the Great Depression, the Federal Government did!

  • CarnageScream

    Posted Jan 29, 2009 5:36 am PT

    I thought we faught a war not to pay taxes? To the liberals that think this is a good idea, wake up we will never see any of this money.

  • DMBdrunkass420

    Posted Jan 29, 2009 5:18 am PT

    great idea...our infrastructure here in NC is failing all over the place, hopefully the money will be used for shovel ready projects around the triangle. I certainly don't mind paying a bit more for my digital downloads if it helps us out of this time.

  • grigjd3

    Posted Jan 29, 2009 12:10 am PT

    @LqdSnk, the points are only taxed if you buy them in a store. Get them online and they are not taxed. State governments are going after this because purely digital retail is a growing market. Video games, music and movies, all of which in the past sold over the counter, are now selling strong and growing in the digital markets. When considering a source of tax revenue, they turn to what they expect to be a cash cow. Doesn't mean it doesn't sck though.

  • LqdSnk

    Posted Jan 28, 2009 11:44 pm PT

    Don't we already have to pay taxes on the points that buy the games for the consoles? So gaming would have to be excluded then no?

  • ser136

    Posted Jan 28, 2009 10:28 pm PT

    Great this sucks for me I live down here in Boring NC

  • psx_warrior

    Posted Jan 28, 2009 9:54 pm PT

    This is all crazy. The economy is collapsing right now. Things will get worse despite president sotiro, I mean obama, trying to infuse more worthless paper into the country. All the taxes in the world won't save north carolina since people are losing their jobs left and right, and they won't be able to pay them.

  • LtPrino

    Posted Jan 28, 2009 9:45 pm PT

    They need to take taxes from the overpaid government officials paychecks and leave online game transactions alone. What the heck are they spending 2 Billion on anyway? It is Friggin NORTH CAROLINA!

  • Jhedan

    Posted Jan 28, 2009 9:18 pm PT

    Nice, this will encourage people to keep downloading illegal stuff.

  • FarmFreshDX

    Posted Jan 28, 2009 8:55 pm PT

    ptown, are you crying anarchy over a simple tax? If you could print money, would you?

  • ptown58

    Posted Jan 28, 2009 8:40 pm PT

    "Give the bailout money to the American tax payers instead of the banks, to get out of debt which would go to the banks from there.".J.S.

  • ptown58

    Posted Jan 28, 2009 8:35 pm PT

    An extra 5 cents ? whining ? you pay it since you like it and we will not. This money grubbing political system has got to stop, call them now.

  • lamprey263

    Posted Jan 28, 2009 8:21 pm PT

    Well, it would be interesting for once if GameSpot actually said what the proposed tax would be. After all, all this whining would look rather silly if they just taxed digital content an extra 5 cents on every dollar.

  • Aggie1295

    Posted Jan 28, 2009 8:04 pm PT

    Have these politicians ever considered spending less money? That's how I have to deal with a revenue shortfall.

  • Jedilink109

    Posted Jan 28, 2009 7:52 pm PT

    Basically what this says to me is that the government, just like everyone else here in America, has no idea how to manage their money very well.

    If they wouldn't go over on everything all the time they wouldn't need to take money from consumers even more than they already are. This is a totally lametastic idea.

  • daabulls23

    Posted Jan 28, 2009 7:24 pm PT

    Let the taxing frenzy commence. If it gets past in one state, who knows how many states will follow suit?

  • siLVURcross

    Posted Jan 28, 2009 7:09 pm PT

    Government FAIL.

  • pukmok

    Posted Jan 28, 2009 6:53 pm PT

    The government needs to stop taxing our income and then taxing it again when we spend it or die with it.

  • pukmok

    Posted Jan 28, 2009 6:52 pm PT

    Well in Texas the PSN servers for us are in Texas so I get taxed when buying stuff. They could only tax itunes if the download servers were in their own state though because once you cross state borders the states cant decide who gets the right to tax.

  • Zloth2

    Posted Jan 28, 2009 6:48 pm PT

    Errr, in Kansas we've had to pay taxes for our online transactions for years. Of course, nobody has receipts and records of such things, so you just check the "I don't know what I bought, here's $35" option.

    Online transactions were kept tax free while the industry started up. It's quite definitely past that initial stage now. Time to start paying the rent.

  • Everiez

    Posted Jan 28, 2009 6:40 pm PT

    One step closer to greediness and corruption path. Tax everything. They're surely fast when it comes to increasing income from tax.

  • keyser27

    Posted Jan 28, 2009 6:33 pm PT

    Duh. We put a liberal democrat in as governor. Of course they will raise taxes. That's all they know how to do.

  • DontEatCream

    Posted Jan 28, 2009 6:30 pm PT

    Damnit, I knew this wonderful, tax-free world of digital distrubution wouldn't last forever.

    *sheds tear*

  • X-Playkid

    Posted Jan 28, 2009 6:11 pm PT

    DAMMIT! I live in NC

  • nakasa5

    Posted Jan 28, 2009 6:11 pm PT

    everyone needs to ask themselves a question: is there anything we do or come into contact with on a daily basis that is not taxed, regulated, or subsidized by the government, state or federal? this is why i am a conservative. the size of government is inverse to an individual's freedom.

  • VFG

    Posted Jan 28, 2009 6:04 pm PT

    Jesus, where do the taxes end? Does the government need to nickle and dime every single money transaction, even on digital content now? When this country was founded the only taxes were those on imported goods, now we even get taxed for dying. Every single aspect of our lives are taxed, from cell phone usage, cable service, gasoline, estates, owning property, almost everything you purchase or do is taxed in some way. Isn't anybody esle sick of it?

  • marcopolo4212 posted Jan 28, 2009 6:03 pm PT (does not meet display criteria. sign in to show)

    marcopolo4212

    Posted Jan 28, 2009 6:03 pm PT (hide)

    haha good thing i live in canada

  • Adam_the_Nerd

    Posted Jan 28, 2009 5:57 pm PT

    Just when you thought these rip-off DLC content couldn't get worse

  • Syntax82

    Posted Jan 28, 2009 5:54 pm PT

    I guess since I live in state with a hefty sales tax and that taxes online purchases it doesn't seem like such a big deal to me. If the state has a sales tax that is being by passed because of digital mediums the state has to do something to recoup the revenue.

  • z4twenny

    Posted Jan 28, 2009 5:49 pm PT

    i don't live in NC but i can agree, that sucks.

  • NR1224

    Posted Jan 28, 2009 5:46 pm PT

    As a NC resident, I can completely honestly tell all of you...NC legislature would most certainly be the ones to pull this s**t. It's stupid, wrong, and maybe even immoral, but I for one am not at all surprised. I'm almost embarrassed to admit that my own ELECTED officials represent the population so poorly.

  • HaaZ

    Posted Jan 28, 2009 5:44 pm PT

    Man F*** them. I just moved to North Carolina. I don't need them throwing extra taxes at me all because they can't manage their budget. They screw up, and expect me to pay for it. Total BS.

advertisement
Click Here

Hot Stories

Newsmakers

Featured Stories

Submit News

Got tips? Send them in!