Georgia Becomes Latest State To Consider Sales Tax On Netflix
John Buhl with the Tax Foundation said with these “Netflix taxes,” as they’re often called, governments have been trying to update their tax codes to reflect new technology.
Brian Cantoni / wikimedia commons
Georgia lawmakers are considering a new tax on digital-streaming services. It’s something states and cities around the country have pushed for — and not always with success.
The goal of the bill from Georgia Rep. Jay Powell is to expand broadband Internet to rural areas. To do that, the legislation imposes a 4 percent sales tax on online entertainment services, like Netflix and Spotify.
John Buhl with the Tax Foundation said with these “Netflix taxes,” as they’re often called, governments have been trying to update their tax codes to reflect new technology.
“We are consuming the same kinds of music and movies that we always have, but it’s moving into an area where the sales tax doesn’t really apply right now,” Buhl said.
But the industry has lobbied hard against these fees, according to Paul Verna, who follows digital trends at the research firm eMarketer. And Verna said taxing online services can be complicated.
“Suppose you’re a traveling sales rep and you’re doing most or all of your Netflix viewing on the road. So why should you be paying taxes to your local or state government?” he said.
Earlier this year, the Virginia Legislature dropped its effort to tax the tech companies. Alabama tried to come up with a new tax for two years without any luck.
Ultimately, only a handful of places, like Pennsylvania and Washington state, have actually approved taxes on streaming services.
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