Attempting to get his state's economy under control in the face of the recession, New York Governor David Paterson has proposed a budget that includes taxes on downloable content, including music, movies, and games.
In a budget proposal that can be read in its entirety online, Patterson calls for state worker layoffs, cuts in education and health care spending, expansion to the state's lottery program, and taxation on all digitally delivered property. From the official document:
Close Digital Property Taxation Loophole. Imposes 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 to achieve tax parity. For example, with the passage of this bill, 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.
I wouldn't worry too much just yet. The budget still needs legislative approval, and I can't see much of a chance of that happening, especially with New York City Mayor Michael Bloomberg firmly opposed.