Australia made it official this week, implementing a tax on Netflix and all similar services in an effort to create “a level playing field.” This new tax has been in the works for a while and is estimated to bring in $350 million the first year.
Australia is not the first country to tax services like Netflix; Japan, Norway, South Korea, Switzerland, and member countries of the European Union have or plan to implement similar taxes.
With the continued growth of cord cutting, a major hole will be left in U.S. state and federal tax revenues. You can expect both state and federal government will be using examples like Australia to implement new taxes to replace these lost revenues.
According to the company, Netflix will be compliant with all federal and state tax laws. Netflix did not put in any major effort to block the tax in Australia. This means these taxes will be passed along to the consumer and will not be paid by Netflix and other services.
As countries around the world move to tax Netflix, and state and federal government in the United States move to tax online services, such as Amazon, the question is not if the U.S. will try to tax Netflix but when.