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from the tax-ALL-the-things! dept
Hungry to boost municipal budgets, a growing roster of states and cities have spent the last five years or so trying to implement a tax on Netflix, Hulu, and other streaming services.
Sometimes (like in Chicago) this has involved expanding an existing amusement tax (traditionally covering book stores, music stores, ball games and other brick and mortar entertainment) to online streaming.
Other times this has involved trying to leverage existing cable TV laws or ordinances to try extract their pound of flesh from Netflix. In both, it involves taking rules written for the physical world, and applying them to the internet. Often haphazardly.
Enter New York State, which is the latest to propose taxing Netflix and other streaming services. More specifically, one proposal in NY State’s $233 billion budget for next year would apply a 4 percent state tax and 4 percent local sales tax on digital streaming products in a bid to help cover $9 billion in state transportation and infrastructure upgrades, maintenance, and improvements.
The plan wouldn’t just apply to streaming video services, but also to audiobooks, music streaming and downloads, podcasts, games, and other content that is “electronically or digitally delivered, streamed or accessed.” Opponents of the proposal say the costs will all just be shoveled onto the backs of consumers, who are already flustered by companies like Netflix’ increasing ‘s recent nickel-and-diming efforts:
“To attack every single individual that has this type of device on their television or on their computer just is not sensible and really goes after the working men and women of our state,” agreed Assemblyman Stephen Hawley, who favors finding ways to cut the budget instead.
Another proposal percolating around the NY state legislature is to boost corporate taxes on companies reporting more than $5 million in income, though I’m guessing that plan will mysteriously get lost in the weeds.
New York’s budget needs to be finalized by April 1. If they pursue the Netflix tax, they may or may not have a good time in the courts. Ohio officials saw their effort to force Netflix to pay a “franchise fee” (like a traditional cableco) get shot down in the courts, which argued that you can’t impose such fees on a company that has no meaningful, actual physical presence in the state.
I would suspect that imposing a more general tax might have a better luck in the court system. Maybe. Most of the efforts to tax Netflix through franchise fees reserved for traditional cable companies, whether in Georgia or Texas, have mostly so far just resulted in plenty of billable hours for lawyers and little else.
Filed Under: franchise fee, netflix tax, new york, streaming tax, streaming video, tv
Companies: netflix
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