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Report: States Across the US to Start Taxing Streaming Service Subscriptions

Stephanie Sengwe

According to a new report by CNBC, states across the U.S. are looking to benefit off the streaming wars by taxing services such as Netflix, Hulu, Amazon Prime Video, HBO Now and even newcomer Disney+. In the last few years, “around half of states” across the nation have imposed sales taxes on the services, with several more states not too far behind, CNBC said.

CNBC reported that Maine, Illinois, Kansas, Massachusetts and Utah are just some of the states considering putting sales taxes on streaming services, while leaders in Alabama and Louisiana brought up the prospect in recent years.

With the streaming industry growing and pay-TV losing subscribers year-over-year, lawmakers are merely trying to keep up with the times. “State sales taxes — most of which were introduced around the 1930s, decades before the internet’s ascension — have historically only covered tangible goods … As fewer consumers buy physical goods like compact discs and DVDs in favor of intangible streamed content, states have had to update their tax laws accordingly or risk eroding their tax revenue,” Richard Auxier, a research associate at the Urban-Brookings Tax Policy Center, told CNBC.

Over the past few years, state sales taxes have increased to a national average of roughly 6 percent, CNBC said. This may not make a huge difference for people who subscribe to individual services. However, for consumers who sign-up for multiple services, this could mean an additional $4 at the end of each month, on top of $63 in subscription fees, CNBC noted.

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