Do you consider Netflix taxable? If not, then you’re on the wrong page there, buddy. Some cities want to start implementing a tax on all streaming services. Whether or not it happens, well, that’s up to you.
WFSB reports that the discussion ignited in Virginia. Lawmakers want to tack on a 5 percent Communications Sales and Use Tax on streaming services like Netflix. Currently, only cable television and satellite radio meet the requirements for such taxation. For now, internet streaming sites claim exemption.
But, should this law go through, it might just open up too big of a can of worms.
So, you probably pay about $9.99 a month for Netflix, right? Well, should that tax go through, you’ll have to fork over an extra 50 cents. Considering we bitch and moan about our monthly bills going up by $1, you know exactly how people will respond to the new tax.
Apparently, cable TV has a “competitive disadvantage” over Internet streaming services. The thing they fail to realize is that: the “disadvantage” is all in the pricing. People don’t want to pay $100 a month for a ton of channels they don’t watch. On top of that, cable is seemingly overrun by commercials. You sit through 10 minutes of commercials with every 30-minute program. It’s ridiculous.
So, for a tenth of the price, the consumer enjoys commercial-free TV and the ability to stream content at their own pace. Also, all that seems to grace cable TV are reality shows where the best sob story wins (looking at you, Chopped.)
On top of that, this proposal won’t just tax video streaming services… they want to tax ALL streaming services, like Spotify.
Also, they want the exemption to end for prepaid wireless phone plans, like Straight Talk. Basically, they want to go after all the services you use to cut down on costs.
So, if you found a way around the exorbitant prices of entertainment and Internet services, they want to tax it. Say goodbye to all that money you started to save…
Naturally, this proposal ignited a firestorm because residents say they pay too much in taxes as is. An added tax on an online service will turn into a slippery slope.
Who wants to bet these lawmakers will then try to tax YouTube or any video/music sharing site? We all see what this proposal will eventually snowball into. Then again, with this whole “Net Neutrality” fiasco, these politicians might be wasting their time.
No one will want to pay extra for any streaming service and, on top of that, pay an additional tax. They just won’t.
Still, these officials argue that Netflix killed cable and Spotify killed music stores… so, they want a piece of the pie to make up for lost sales revenue. But, the principal is, are these services taxable? Or, are the taxes already rolled into their flat monthly rates?
So far the discussion remains in the Virginia area, especially Newport News and Hampton. But you know it’s only a matter of time before the conversation spreads to other states.
Namely: Connecticut because our lawmakers love finding new things to tax. And Netflix, Hulu, AmazonPrime, and Spotify seem ripe for picking. Our politicians love convenience.
Which, should Net Neutrality stay, you’ll watch people lose the Netflix and go back to The Pirate Bay or ProjectFreeTV. Or, better yet, find a bunch of sites just like them pop up at a rate the feds can’t keep up with.
Either way, this proposal won’t yield their desired results. It’ll only serve to create a bigger Internet piracy problem because people don’t want to pay anymore money.
That’s my theory, anyway. Have a better one?
Anyways, what do you think will happen with this proposal? Is it doomed or will it become our new normal?