For the amount of Netflix binging we do, we really shouldn't be quibbling over its cost. But, especially if you've got multiple subscriptions on your bill each month, those dollars add up. Until now, taxes (thankfully) haven't been a part of that equation, but it looks like that trend is changing.
The state of Pennsylvania just adopted a new 6% sales tax on digital downloads and subscription services. The tax (dubbed the "Netflix tax") covers services such as Hulu and Netflix, as well as all digital music, app, e-book, online game, and ringtone purchases. Curiously, newspaper and magazine subscriptions, as well as digital downloads of the Bible, can still be purchased tax-free. The tax only comes into effect if you make a purchase with a Pennsylvania billing address.
The state is hoping this move will help its $1.3 billion deficit. (The tax is expected to bring in $47 million.)
If other states start enacting similar sales taxes on our digital activities, our pocketbooks could be in big trouble.
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