New York Governor David Paterson’s December tax proposal that would see the state nickel and diming downloadable content has been scrapped in favour of large amounts of federal stimulus money.

Paterson’s proposal, issued in December, included a section titled “Close Digital Property Taxation Loophole”, which would impose taxes on all digitally-delivered items, including iPod songs, digital movie rentals, and video game content. In a press conference in Albany yesterday, the governor announced that that particular provision had been removed, along with taxes on clothing over $100, haircuts, non-diet soda, movie tickets, and gasoline priced over $2.

According to Paterson, the taxes were viewed as “inconvenient and frustrating” by New Yorkers, who viewed them as a direct attack on their leisure activities, and the one thing no one wants to deal with is inconvenienced and frustrated New Yorkers.

New York skips Internet, soda and other tax hikes [Reuters]

“Georgia’s introduction of games development tax breaks illustrates once again that other state and national governments are competing to create the most hospitable environment for games production. If the UK Government wants to see a thriving video games industry in this country, then it must create a more favourable taxation system, keep the regulatory burden on business relatively light and work to increase the supply of suitably qualified graduates,” said Tiga CEO Richard Wilson.

Government in Montreal and France offer subsidies or tax credits to game development companies similar to the recently-approved tax breaks in Georgia, and Tiga believes “the competitive environment is slanted against UK developers and that the UK Government needs to respond.”

“The UK games development sector continues to be a world beating industry, but we cannot afford to ignore the heavily subsidised competition. The playing field continues to be tipped against UK games developers. Our position as a leading player in the development of video games is at stake,” said Wilson.

“UK games developers can compete successfully against games developers all over the world where market conditions are fair,” said Tiga CEO Richard Wilson.

“The UK is the fourth largest developer of games in the world in terms of revenue generation. Games developers contribute 30 per cent of the country’s media exports.

“However, Canadian government subsidies for games developers mean that the playing field is increasingly tipped against UK based games developers.”

Beyond the short-term fix of tax breaks, Tiga is agitating for a World Trade Organization investigation into whether Canadian incentives are breaking WTO rules on fair trade. Wilson said “If they do, as seems likely, the Government must take action via the World Trade Organisation against Canada at the earliest opportunity.” Who’s ready for a gaming industry redux of the Seven Years’ War?

Tiga urges government to create competitive environment [GamesIndustry.biz]

We suppose that this sort of diversion of funds makes more sense than others. I just hope they don’t limit the use of PSPs for these poor kids brought to tears by the prospect of experiencing “nature”. And, please New Mexico, make sure these kids are well stocked on Happy Meals.

A Tax to Remember [The Huffington Post via GamePolitics]

After the Government told the Game Developers’ Association of Australia to talk to the hand, Labor responded with promises of a committee to discuss the issue, if it was elected.

Now, GDAA CEO Tom Crago and Australian Greens’ Senator Christine Milne are urging gamers to give the Greens their vote in the upcoming election. In doing so, Milne will do her bit to make the rebate happen. She won’t even screw around with a committee, apparently.

For the curious, you can read the Greens’ official policy on the matter at GreensBlog, or hit the post from whence it came.

Good news? Look what tax breaks did for Montreal. Just don’t mention the mammoth carbon footprint made by your 360, PS3, Wii and PC.

Greens get game [Screen Play, thanks Stephen!]

Sound familiar? It’s where Ubisoft Montreal is based, arguably one of the top development houses in the world. It’s also the home of Assassin’s Creed. Need I say more?

In 1996, Quebec established a special fiscal program for multimedia titles, whereby companies developing games could receive a tax credit on labour costs. Depending on the type of game being made, developers can currently receive a break of up to 30%, with an additional 7.5% for French-language titles.

How effective have these tax incentives been? I asked Ubisoft Montreal’s creative director Patrice Desilets this very question while he was here promoting Assassin’s Creed.

So Ubisoft grew bigger, and since then EA came, now we have Eidos. Smaller companies of Quebec became larger. Right now, I think it’s 4000 people in the Montreal area are working in games. When I started [in July 1997], it was maybe 200 people, maybe a little bit more.
…
I read in the newspaper the other day, it was a survey about when Montreal … is mentioned in international media, Ubisoft was the fourth reason Montreal was mentioned in any article.

Pretty impressive growth in 10 years, wouldn’t you say?

It wasn’t a dream as a French-Canadian to become a game designer. Now it is.

Why can’t it be the Australian dream too?

Good on you to those who wrote to the Minister regarding the issue, and I sincerely hope you get a productive reply. Alas, judging from the letter Oz Kotakuite Martin received in response to his plea, my hopes have been dashed across the stones of uselessness and ignorance like a pair of old trousers.

Need more proof of the Government’s distain? From the letter (which was written by one of Minister Coonan’s advisors):

The Government’s Australian Screen Production Incentive, which was recently enacted, incorporates three components: Producer Offset; Location Offset; and Post, Digital and Visual (PDV) Offset. These … are paid against a production’s Qualifying Australian Production Expenditure (QAPE).

That’s great, but what the heck does it have to do with games?

While games are not eligible genres for the new offsets, this does not exclude game developers from providing content to eligible genres. For example, an Australian games developer could be contracted to provide content as a component of a film or television program. Such expenditure could be claimed as QAPE.

So essentially developers are screwed unless they’re creating a game for TV or film? The only situation I can imagine where this would actually happen is if a developer was willing to indulge in tax fraud. What if you’re making a game based on an Aussie film or show? Doesn’t look like that would cut it either.

All I can do is sigh… again. You can see the entire letter after the jump.