Proposed North Carolina Download Tax Would Include Games, DLC

North Carolina’s News-14 reports that state legislators are considering a proposal to levy sales tax on digital purchases, including video games, music, movies and software.

Such a measure could bring as much as $12 million annually to state coffers. Like many other recession-plagued states, North Carolina is facing a large budget deficit.

Rep. Paul Luebke (D, left) told News-14 that taxing digital goods makes sense:

We used to think of everything in terms of being tangible. Nobody thought of how you could possibly download anything.

So if you buy a book in a bookstore, you’re going to have to pay sales tax on it. If you’re downloading a book from a book seller, you should have to pay sales tax on that as well.

As GamePolitics reported last month, New York is considering a similar measure.

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  1. timada says:

    The tax man will tax anything they can find, I hope they never get to go through with this, surly the companies whose products are going to be taxed realise this will reduce their customers. Download games should only be taxed if the publishers agree to it, and I’m sure most will want to avoid it.

  2. CommiePuddin says:

    Fine, so long as the server, client and transaction processor are all in North Carolina.

    If not, then the tax infringes on the federal government’s right to regulate interstate and international commerce, as enumerated in Article I, Section 8 of the United States Constitution.

    I wish I lived in the state.  The instant it hit, I would download something on XBL, pay the tax and sue.

  3. Shahab says:

    Ha ha, try and collect that tax when the company isn’t based in your state. States have been moaning about online sales for years. Unless the company is in state you can’t force them to collect, and do you think the customer is really going to self report? For now, this stuff is doomed to failure. When tech gets in place to make enforcement easy… we’ll dump our digital downloads into the ocean!

  4. Ghost Coins says:

    So, states can tax goods that use the state infrastructure.  Gasoline, food, electricity, etc. are taxed at a state level because the state has invested resources, and taxing goods and services transported through those supplied lines are understandable.  HOWEVER, a download is already taxed.  The income used to purchase that download has already been taxed by the state for all of it’s prerequisite needs.  Companies that operate a business in the United States or in that particular state pay payroll taxes, etc., again to the needs of the state.

    Effectively, they have received their tax revenue from the internet provider, from the power company, and from several other resources in relation to the transaction of a single purchase of a song.  I concur with Bill in this regard.  The taxes are created to support a government that can provide services to the nation/state/city.  The taxes should not provide and undue hinderance on transactions and business.  Taxes were created by the government to allow them to support the people.  The people were not created to provide taxes to an over inflated government.   It is time that the fat be trimmed, and the governments of the United States get a little leaner.  Cut the number of BS paperwork and red-tape, re-evaluate contracts for efficiency and cost effective ratios.  That is where you start.  Not looking for more ways to squeeze the people you have been elected to represent for a few more pennies on the dollar.

    I would like to know how much of a $0.99 download is already based on tax revenue?  10%?  20%?


    To be persuasive we must be believable; to be believable we must be credible; credible we must be truthful. Edward R. Murrow

  5. Shadow D. Darkman says:

    Quit messing with my State, Luebke!


    "Game on, brothers and sisters." -Leet Gamer Jargon

  6. Yuuri says:

    I know that I get charged a sales tax for my WoW fees whenever the charge comes up on the credit card.

    But I know a trick for getting around it. I live but 10 minutes from the state line, and the next state over doesn’t have a sales tax. So I go there and pick up the 60 day prepaid card.

  7. cutetei says:

    Value Added Tax or something… basically a tax for the sake of tax these days.

    UK tax system is a complete shambles from our benelovant "leader". Gordon Brown was chancellor for years before he became "Prime Minister".

  8. NovaBlack says:

    In the uk we already have to pay tax 🙁


    Even subscription fees to MMOs and anything of steam for example, gets 17.5% added onto it as VAT. Nice

  9. Shahab says:

    I usually think you are a crazy asshole of course, but here I agree. Register, pay your f’cking taxes, and become a resident alien or something. Then if you continue to work, pay taxes, not commit any crimes, learn English, etc., maybe you can apply for citizenship.

  10. Bennett Beeny says:

    "I am against illegals that commit crimes."

    Erm… isn’t that a tautology?  Illegals are by definition criminals.  Anyway, the vast majority of illegal immigrants work a lot harder for a lot lower wages than almost anyone else in the US.  And most of them would be happy to pay taxes.  The problem is not the immigrants – the real problem is the ethics (or lack of them) in the people who have a vested interest in hiring illegal immigrants.

  11. Austin_Lewis says:

    How about they pay taxes and they can have three year work visas?  In some states, the immigrant problem is out of control, and they often get access to benefits they ought not have.

  12. DeepThorn says:

    I am against illegals that commit crimes.  Those that work hard, I feel, are more American than anyone in the US….  after all, we did steal their land…

    I think anyone that commits a major crime (murder rape…) in the US should be sterilized and deported to Cuba or something…  US citizenship fully revoked.

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  13. hayabusa75 says:

    I’m a huge fan of the flat tax, myself.  However, I don’t see it becoming reality anytime soon.

    "There is no sin except stupidity." – Oscar Wilde

  14. Brokenscope says:

    Income taxes were legal. They just had to be apportioned among the states based on census data.

    All the 16th amendment did was make it legal for them to collect the tax without apportioning it.

  15. beemoh says:

     The question is how this applies to downloaded content paid for using a fake currency like Microsoft Points or Nintendo Points- if the download tax is levied on these, then you get taxed twice- once when you buy the points, and again when you buy the content.

    Dangerous game to start playing.


  16. sortableturnip says:

    They can add it on with all of the other taxes we pay:

    Accounts Receivable Tax

    Building Permit Tax

    CDL License Tax

    Cigarette Tax

    Corporate Income Tax

    Dog License Tax

    Federal Income Tax

    Federal Unemployment Tax (FUTA)

    Fishing License Tax

    Food License Tax

    Fuel Permit Tax

    Gasoline Tax

    Hunting License Tax

    Inheritance Tax

    Inventory Tax

    IRS Interest Charges (tax on top of tax)

    IRS Penalties (tax on top of tax)

    Liquor Tax

    Luxury Tax

    Marriage License Tax

    Medicare Tax

    Property Tax

    Real Estate Tax

    Service charge taxes

    Social Security Tax

    Road Usage Tax (Truckers)

    Sales Taxes

    Recreational Vehicle Tax

    School Tax

    State Income Tax

    State Unemployment Tax (SUTA)

    Telephone Federal Excise Tax

    Telephone Federal Universal Service Fee Tax

    Telephone Federal, State and Local Surcharge Tax

    Telephone Minimum Usage Surcharge Tax

    Telephone Recurring and Non-recurring Charges Tax

    Telephone State and Local Tax

    Telephone Usage Charg e Tax

    Utility Tax

    Vehicle License Registration Tax

    Vehicle Sales Tax

    Watercraft Registration Tax

    Well Permit Tax

    Workers Compensation Tax


    Why is it that we weren’t paying these taxes 100 years ago?

  17. Bill says:

      Fuck, I hate politicians.  Cut your fucking budgets, pricks.  When I can’t pay my cable bill, I have to cancel it.  I don’t turn around and demand every other person in the state pay for my cable.  But that’s what they do so to speak.

      If being a gamer becomes more expensive, then I won’t be able to buy what I used to. So then to make up for people who are buying less (or quitting altogether) they’ll have to raise the taxes on the remaining gamers.  More will quit, rinse and repeat…


  18. Heliostat says:

    The internet is a global thing. How would they tax downloads in North Carolina? Would it for anything downloaded by a user in NC? Or for a seller in NC? And what about the location of the server?

  19. Lcpuche says:

    Give them legality if they pay taxes, problem solved.

    If you are agains immigrants well we might have a argument between us ^^

  20. Austin_Lewis says:

    God, Luebke.  What the fuck man.  How about you tax all the illegal fucking immigrants in North Carolina, its supposedly somewhere around 4 million now right?  There’s how you can pick up some goddamn money, not by taxing digital distribution.

  21. King of Fiji says:

    Then I’m glad I’m still buying tangible things that were already taxed to begin with.  Its not like I’m loosing anything on this until physical media is completely kapoots. 

  22. Geoff says:

    Only a matter of time before we’ll all have to pay sales tax on downloadable content, regardless of where we live.

    The more popular it becomes, the more likely the government will find a way to squeeze some money out of it.  Nothing new or unexpected by it.

    It sucks, but it’s inevitable.  The shitty economy is only going to accelerate the process.


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  23. Doomsong says:

    I still say digital taxation is just going to encourage piracy…

    "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety" – Benjamin Franklin

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