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Those looking for a deal on all their movie and TV needs have probably already cut the chord on their cable plans to instead tune in to streaming services for all their entertainment needs. While paying $7.99 a month might be a whole lot cheaper than hefty cable bills, the price to binge watch Stranger Things and Gilmore Girls is about to increase.
That’s because there have been talks about adding a tax to member’s Netflix subscription.
What Is The Netflix Tax?
The “Netflix tax” is being proposed by local governments around the U.S. as a way to make up for the loss of taxes that come with cable subscriptions and home phones. The idea, the city council in Pasadena, CA for example says, is that Netflix is essentially an utility, meaning it can be taxed just like other utilities such as electricity and water.
Pasadena has been one of the first cities to propose the Netflix tax, but there are now more than 40 cities in California that are toying with the idea.
How Much Is The Netflix Tax?
The Netflix tax in Pasadena would be a 9.4 percent tax and include not just Netflix, but other services like Hulu and HBO.
When Will It Be Added?
Of course residents are probably not happy about paying the tax, especially since one can argue that Netflix and the like are websites and apps, therefore NOT utilities and thus cannot be taxed.
As of now, no city in California has yet to implement the Netflix tax. However, Pasadena is expected to have the tax take effect on Jan. 1.
Chicago has previously implemented what is called an amusement tax that includes subscriptions for digital content like streaming music, movies, TV shows and games back in July 2015. This includes a tax on services like Netflix and Spotify. The nonprofit Liberty Justice Center filed a lawsuit, claiming the tax is illegal.
This was also a 9 percent tax.