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If you’re a fan of digitally streaming your favorite TV shows and movies on online streaming platforms like Netflix, you’re going to want to pay attention to what’s happening in Pennsylvania.
Netflix fans, watch out.
For those who enjoy digitally streaming or downloading TV shows, movies and games, there is a new tax that could potentially impact you.
In Pennsylvania, a new extension of its 6 percent sales tax will allow the state to charge a tax for any digitally downloads or streaming services like Hulu, Amazon or HBO Now. The tax will also reportedly apply to music streaming, e-books, online games and even ringtones. The only tax exemptions will be for digital versions of the Bible along with magazine and newspaper subscriptions.
Surprisingly, this actually isn’t the first area to implement a digital sales tax. In July of 2015, Chicago implemented a “cloud tax” that applies a 9 percent sales tax for any digital or cloud-based services, including online streaming platforms such as Netflix and Spotify.
The ability to tax online and digital sales has become a big question over the past decade, as its difficult to determine where the purchases are coming from. For years, Amazon was able to avoid charging sales sales, but not is collecting sales tax in over half of the states in the country.
This situation is far from over, and only time will tell whether or not we can find an official guideline for how to tax online streaming and retail services. Until then, we will be keeping an eye on other states that might implement this “Netflix tax”.
