The levy is being held in states across the US, which could see taxes on video subscription fees for the likes of Netflix, Amazon Prime Video and Hulu of about $1 per month each.
The tax, which would enable local governments to draw into an extra revenue stream, is now due to grown into effect in Chicago, Pennsylvania, and Florida, but now it is announced that California, Alabama, Louisiana and West Virginia are also thinking the added fee.
Municipal governments that are forcing for the tax defend the action by claiming that online streaming is basically the same as video rental from former brick and mortar stores such as Blockbuster Video, which was required at the time.
“We don’t have Blockbuster Video anymore. We were crediting them tax, that’s got substituted by streaming services like Netflix, so for us, it’s actually just replacing one tax with different for the exact same service’,” Larry Downes, project administrator of Georgetown University’s Centre for Business and Public Policy, described to USA Today.
Also, as streaming services grow a popular choice to traditional pay TV, subscriber figures are falling, which means states are seeing fewer customers to tax. Targeting the online market could be a way to recover that lost capital.
“When you see the sales tax base decreasing like this, it is reasonable for lawmakers to get together and say, ‘Is there a plan that we can expand this?” the article quoted John Buhl of the Tax Foundation.
With many customers signed up for further than one video streaming service the $1 tax could quickly add up to over $50 a year, which, when attached to the subscription fees they already pay to access the content, is a notable amount.
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