Watch out: The “Netflix tax” is coming.
At least in Pennsylvania. The state legislature there recently extended its 6 percent sales tax to digital downloads and subscription services like Netflix and Hulu.
Though it’s called the Netflix tax, colloquially at least, the fee will also apply to streaming and downloads for music, e-books and apps. Digital versions of newspapers, magazines and the Bible, will be exempt.
Pennsylvania joins a select group of locations that have begun to put local taxes on digital services. Chicago already has a similar 9-percent tax, often called its “cloud tax.” Digital goods are also taxable in Minnesota. Similar taxes have come up in Canada. Netflix even battled in Kentucky over telecommunications taxes there, a way some states have tried to tax digital services without imposing a sales tax. Read more…