Alabama leaders propose taxing Netflix, other streaming services

Updated: Mar. 16, 2017 at 3:13 PM CDT
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(WAFF) - The Alabama Department of Revenue is considering a rule change that would tax all streaming services. That includes Netflix, Hulu, and even music services.

You or someone you know likely streams movies or shows. Streaming services have spread like wildfire over the last decade, and now the Alabama Department of Revenue is debating amending regulations to make sure the state gets its cut.

"There's clearly a revenue stream there," said Athens State University's Tom Pieplow. Pieplow teaches economics and says this proposal shouldn't come as a shock as government looks to tax technology.

"Twelve years ago there were over 9,000 Blockbuster stores employing over 60,000 people. Those are all gone, but people are still satisfying their need but they're doing it online," said Pieplow.

According to the rule changes, digital transmissions, such as "on demand" movies, television programs, streaming video, streaming audio, and other similar programs, are considered tangible personal property subject to the rental tax, regardless of the period of the rental or the method of transmission.

"The city of Chicago proposed this back in 2015. Just in the city alone, it was estimated they would be able to garner up to $12 million just by taxing the streaming services," said Pieplow.

Big time money, but it's sure to set up a big time debate. A hearing on the proposal is set for April 11. If finalized, then the rules would become effective on July 1.

To view the entire regulation amendment, click here.

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