New York Legislators Considering Tax on Streaming to Avoid Raising Subway Fares
The necessity of taxes is a debate that has raged on long before the United States was even a country. That discourse is unlikely to go away any time soon, especially as streaming platforms are now firmly entrenched in the discussion of services that could/should be taxed.
That discussion is currently underway in New York, where legislators are seeking solutions to prevent subway fares in New York City from rising, according to the Wall Street Journal. The Metropolitan Transportation Authority is grappling with deficits as passengers have been reluctant to return to public transportation after the peak of the COVID-19 pandemic.
New York governor Kathy Hochul intended to bail the MTA out with a raise on payroll taxes, but lawmakers have signaled they will not cooperate with that plan. Instead, they’ve come up with an alternative proposal that draws in new revenue from a number of sources, including applying New York’s 4% state sales tax to the use of streaming services.
If New York went ahead with this plan, it would hardly be the first state to do so. In fact, 33 of the 50 states already apply sales tax to streaming subscriptions, and many state and local governments think that streaming services should be paying franchise fees originally designed as a tax on cable providers.
The city of Chicago has gone the furthest toward forcing streamers to pay up. In 2015, the city levied a 9% surcharge on all streaming subscriptions, which it dubbed the “Netflix” tax. Apple recently sued the city to attempt to stop enforcement of this tax, but settled with Chicago representatives in the summer of 2022.
If the New York tax on streaming goes into effect, it’s not terribly likely that customers will notice the increase in their streaming bills. Users of Netflix’s Standard Plan ($15.49 per month) would see an extra monthly charge of $0.62 under the proposed new law, which by itself is hardly a budget-breaker. But it will put extra pressure on content providers to ensure they keep releasing quality shows and movies to streaming, as any increase in subscription fees could raise thoughts of canceling in the minds of users.
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.
Netflix offers four plans — on 2 device in HD with their “Standard with Ads” ($6.99) plan, on 1 device in SD with their “Basic” ($9.99) plan, on 2 devices in HD with their “Standard” ($15.49) plan, and 4 devices in up to 4K on their “Premium” ($19.99) plan.
Netflix spends more money on content than any other streaming service meaning that you get more value for the monthly fee.