Over the last few years, a handful of states and local governments have taxed streaming services. Chicago was one of the first to have a tax specifically targeting streaming services. States like Pennsylvania also pushed taxes targeting streaming services. While most states don’t charge a tax specifically targeting streaming services many have ruled that sales tax does apply to streaming services like Hulu.
According to CNBC, more states are looking to extend their sales tax to online services. This tax is already charged on cable TV subscriptions. Now Maine, Illinois, Kansas, Massachusetts, and Utah have proposed bills to bring sales tax to streaming services.
As cord cutting grows this means less tax revenue for many states. Now states have been looking to make up that loss.
This is similar to the fights we saw recently over online sales tax on stores like Amazon. Now paying sales tax on Amazon is common. It is likely that in the future most streaming services will be forced to charge sales tax in most states.
The good news is sales tax is a percentage of the price; therefore, because cable TV prices are higher, cable will charge more tax than cord cutting services will charge.
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