The so-called iPod tax will impose a 4% tax on downloaded music and movies and is a part of Paterson’s plan to tax spending. The tax will apply only to New York State businesses. There is wide speculation that this will drive business out of New York. Supporters reply that this is merely bringing the tax code into the 21st century.

Yesterday, reports came out that in addition to movies and music, the new tax will also apply to XXX-rated material. The industry calls it a cheap political stunt. Some conservative politicians are reluctant to “legitimize” the “skin industry” with a tax.

Source: NPR