New York State Governor David Paterson's $121 million budget, which was released on December 16, 2008, included 137 proposals designed to help bring the state out of the largest budget deficit in history. One of the revenue-boosting measures, the so-called "iPod tax," would tax sales of "digitally delivered entertainment services," including downloaded music, by 4%. This would bring the cost of each song downloaded from iTunes by anyone at a New York address up from the standard 99¢ to $1.03.Times Online: Gov David Paterson calls for 'iPod tax'... (December 18, 2008)

Paterson's proposed budget also included what has been dubbed an "obesity tax," which would add an 18% tax to sugar-laden beverages.Variety: N.Y. governor proposes 'iPod tax' (December 17, 2008) Entertainment services, such as satellite and cable TV and tickets to movies and sporting events, which had previously been exempt from state sales tax, would have those exemptions lifted under Paterson's plan.The Hollywood Reporter: N.Y. may tax pics, pay TV, downloads (December 16, 2008)

''Endless ridicule of what would be a budget that is imperfect but yet purposeful is not helping. Because of the disaster of our economic woes, we are going to have to take some extreme measures."—Governor David PatersonVariety: N.Y. governor proposes 'iPod tax' (December 17, 2008)

"The middle class will have to pay more and get less while the wealthiest New Yorkers slide by under the Governor's proposal. There is no sharing of the sacrifice here —. it's working people getting stuck with the bill."—Danny Donohue, of the Civil Service Employees AssociationVariety: N.Y. governor proposes 'iPod tax' (December 17, 2008)