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Pennsylvania To Apply 6% 'Netflix Tax' (allflicks.net) 271

An anonymous reader writes: Governor Tom Wolf of Pennsylvania has signed into law a new revenue package that will require residents to pay a 6% sales tax on their streaming subscriptions. AllFlicks reports: "Though the term 'Netflix tax' has become popular, laws like this don't just affect Netflix -- they also affect competitors like Hulu and HBO Now. App purchases and ebooks are also affected. They recently decided on a hefty $31.5 billion budget, and they came up $1.3 billion short of paying for it. The government is trying to close that funding gap, and streaming subscribers are being stuck with the bill." Magazine and newspaper subscriptions, as well as digital versions of the Bible, will be exempt from the digital downloads tax, reports CBS Local News in Pittsburgh.
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Pennsylvania To Apply 6% 'Netflix Tax'

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  • by itzdandy ( 183397 ) <dandenson@gNETBSDmail.com minus bsd> on Wednesday August 03, 2016 @08:26PM (#52640601) Homepage

    ...get your vpn proxy now

  • by Anonymous Coward on Wednesday August 03, 2016 @08:26PM (#52640607)

    Start taxing religions with their mega churches, it is nothing but a business.

  • by BitZtream ( 692029 ) on Wednesday August 03, 2016 @08:27PM (#52640609)

    I watch Netflix religiously, surely that is cause for an exemption if the Bible gets one.

    • by monkeyzoo ( 3985097 ) on Wednesday August 03, 2016 @08:45PM (#52640729)

      No one should've modded you down!

      This law is a flagrant F.U. to the separation of church and state...
      "Digital versions of the Bible will be exempt from the digital downloads tax."

      If they wanted an exemption that would do society some good, thye should exempt textbooks, but then kids might get exposed to more of that heretical "science."

      • by R3d M3rcury ( 871886 ) on Wednesday August 03, 2016 @08:58PM (#52640787) Journal

        I was just going to say, that doesn't sound fair. What about digital versions of the Talmud or the Koran or the Bhagavad-Vita?

      • by bws111 ( 1216812 ) on Wednesday August 03, 2016 @09:51PM (#52641121)

        Except there does not appear to actually be such an exemption. It appears to have been made up, probably to generate outrage and hence clicks.

        Here [pa.gov] is what the state says the new changes are. It includes 'e-books and otherwise taxable printed matter'. It does not mention bibles anywhere.

        So, bibles must not be 'otherwise taxable printed matter', right? Nope. Here [pa.gov] is the list of what is taxable. The list starts on page 14. First item on the list is 'Books', and right under the heading is this statement. "Tax is imposed on books, stationery and stationery supplies, including Bibles and religious publications sold by religious groups."

        Oh, and further down the list we find that textbooks are NON-TAXABLE.

      • by RevDisk ( 740008 )
        No, this is clickbait and incorrect information. It's a tax on all digital services or material. Textbooks and purchases by non-profits are exempt. A church buying digital bibles (?) would be tax free. Buying a digital bible from a college bookstore would be tax free. Buying a Bible on your Kindle isn't. Same with any other type of ebook, digital movie, etc.
      • This law is a flagrant F.U. to the separation of church and state... "Digital versions of the Bible will be exempt from the digital downloads tax."

        If they wanted an exemption that would do society some good, thye should exempt textbooks, but then kids might get exposed to more of that heretical "science."

        The summary says the Bible and the law says religious organizations, which includes churches. Textbooks are also excluded. Essentially the summary was flamebait and you fell for it. Way to show your biases though :-) If you're interested in facts as opposed to your rant here are the exemptions:

        There are a few exemptions to the tax. Under current state tax laws, textbooks sales are tax-exempt. That same exemption applies for digital textbooks purchased from or through accredited schools. Purchases made by charitable organizations, volunteer fire companies, religious organizations and nonprofit education institutions won't need to pay the sales tax, either. And newspaper and magazine subscriptions sales are tax-free, too.

        Source: http://lancasteronline.com/new... [lancasteronline.com]

  • by muphin ( 842524 ) on Wednesday August 03, 2016 @08:27PM (#52640613) Homepage
    So will YouTube and Twich be affected? this just another .. oh they make money lets tax it so we can pay for our incompetence ... once somethings taxed, its never removed, they just add more taxes to cover bad decisions. AKA in business terms, Other Peoples Money (OPM)
    • by Jhon ( 241832 )

      "So will YouTube and Twich be affected? "

      I'm sure anyone who pays youtube to watch/rent a movie would be subject to the tax. They would also be subject to the tax if they watch free videos. Because 6% of zero is.... carry the one.... Um... zero.

  • by rsilvergun ( 571051 ) on Wednesday August 03, 2016 @08:28PM (#52640619)
    For those of you playing at home those are taxes that disproportionately impact the poor, working poor and (in this case) working class. They're worth double points because not only do you get to use money to fund tax cuts on the 1% but the people you tax get angry and start demanding tax cuts; which you can oblige with even _more_ tax cuts for the 1%. Uncle Rove calls this "Starve the Beast".
    • I'm seriously doubtful of the claim that the poor disproportionately are users of streaming services, designed to augment or replace cable TV services, that require high bandwidth Internet connections.

      Netflix et al can reasonably be described as luxury items as well - nobody needs them, they're an easy thing to cut if your budget demand them. After my child was born and we had a financial crunch due to the loss of my wife's income, streaming services were the first to go. We only kept Prime because of th

      • by RevDisk ( 740008 )
        That's why the tax bill also included significant tobacco hikes. And in case people just decide to quit, they included a huge hike on vaping products. Along with shutting down a significant number of vaping stores by a one time 40% inventory tax, payable within 90 days. And licensing, which doesn't exist yet.

        You are correct that Netflix, et al are not essentials. However, they're economic alternatives to a high cable bill. The poor are (hopefully) more likely to pick one or two services like Netflix or H
      • People don't understand *why* taxing the poor and middle-class is bad, though.

        6% of 120/year? $7.20, okay, sure, nothing. 4.8 million households? $34 million. Well, there goes (theoretical maximum) 2,345 minimum-wage jobs.

        How's that work?

        There are only so many dollars of income every year. The Fed prints money, the bank loans dollars into existence, you buy things, and part of your money is divvied up as wages. Raising the costs a consumer pays means a bigger chunk of his money gets taken when he

    • For those of you playing at home those are taxes that disproportionately impact the poor, working poor and (in this case) working class. They're worth double points because not only do you get to use money to fund tax cuts on the 1% but the people you tax get angry and start demanding tax cuts; which you can oblige with even _more_ tax cuts for the 1%. Uncle Rove calls this "Starve the Beast".

      I doubt the poor stream off Netflix.

      • Personally I know a lot of people that are poor and they have netflix accounts. You only need a 5mb/s connection to watch netflix, that's nothing.
  • I assume this is like other state taxes (I'm in CA) where consumers are supposed to self-report how much money they spent on the taxable goods every April.

    If that is the case, I don't see the state of PA being able to recoup much of that $1.3 billion budget shortfall.
    • I'm guessing it is a point-of-billing tax. Kind of like how Amazon taxes purchases directly at checkout in some states and not others. If it were done on your income taxes yearly, that would be easy to circumvent as you mentioned.
    • by RevDisk ( 740008 )
      "Use tax". My first after school job when I was a kid was helping prep tax returns for a local CPA. I also fixed their computers. Correct, virtually no one complies and reports their Use Tax. It's on any non-exempt purchase from outside the state. Per PA Department of Revenue: "The use tax rate is the same as the sales tax rate: 6 percent state tax, plus an additional 1 percent local tax for items purchased in delivered to or used in Allegheny County and 2 percent local tax for Philadelphia."

      That's why c
  • Only the Bible? (Score:2, Interesting)

    by MrKevvy ( 85565 )

    From TFA: "Magazine and newspaper subscriptions, as well as digital versions of the Bible, will be exempt from the digital downloads tax."

    What... the Torah, Quran, and Bhagavad Gita and hundreds of others need not apply? Nice lawsuit trolling there.

    • Re:Only the Bible? (Score:4, Insightful)

      by guises ( 2423402 ) on Wednesday August 03, 2016 @09:53PM (#52641135)
      Do you seriously believe that that's in the bill as it's been written? You see that and think to yourself: "This confirms my worldview of stupid evil lawmakers. I believe this 100%, it couldn't possibly just be lazy reporting."
      • by MrKevvy ( 85565 )

        I guess you failed to notice that as I hadn't seen the text of the original bill, I omitted mentioning whether it was the lawmakers or the reporters who were doing the trolling.

        • by bws111 ( 1216812 )

          Seriously? You expect us to believe that when you said 'nice lawsuit trolling' you were maybe referring to the reporter? You saw something that fit in nicely with your narrow world view so you believed it without doing any checking to see if it was true. When it was pointed out that the statement was in fact false you deny that you ever believed it.

    • by pthisis ( 27352 )

      There is no Bible exemption. There's an exemption for purchases by religious organizations (and charities, accredited educational institutions, and volunteer firefighting organizations), which doesn't explicitly mention one religion over another or prefer a religious organization over the Red Cross, Planned Parenthood, or UNICEF.

    • by bws111 ( 1216812 )

      Not lawsuit trolling, just trolling by whatever idiot wrote that. In the Retailers Information Guide [pa.gov] to what is taxable is this statement (page 14).

      Tax is imposed on books, stationery and stationery supplies, including Bibles and religious publications sold by religious groups. (emphasis mine)

      And the summary [pa.gov] of the new taxes simply says it applies to 'e-books and otherwise taxable printed material'. Not a single mention of 'Bibles' anywhere.

    • From TFA: "Magazine and newspaper subscriptions, as well as digital versions of the Bible, will be exempt from the digital downloads tax."

      What... the Torah, Quran, and Bhagavad Gita and hundreds of others need not apply? Nice lawsuit trolling there.

      Pretty sure this is right out of the gates, unconstitutional. Doesn't equal protection apply here? Calling out the bible specifically and not other religious texts is financial discrimination against everybody who doesn't believe in zombie jebuz on a stick.

  • Ok (Score:5, Insightful)

    by jfdavis668 ( 1414919 ) on Wednesday August 03, 2016 @08:29PM (#52640627)
    back to pirating content.
    • Now you not only will risk a lawsuit from the appropriate industry association (MPAA, RIAA, ETCAA), you are also potentially a tax evader. The part of the government that might not have been in Hollywood's pocket now has strong incentive to crack down on piracy.
  • Sounds kinda illegal (Score:5, Informative)

    by fustakrakich ( 1673220 ) on Wednesday August 03, 2016 @08:40PM (#52640691) Journal

    Doesn't this bump into the Internet Tax Freedom Act and the Trade Facilitation and Trade Enforcement Act of 2015?

    • Doesn't this bump into the Internet Tax Freedom Act and the Trade Facilitation and Trade Enforcement Act of 2015?

      Yes, this won't stand.

    • In PA, sales tax also applies to services. Netflix provides a service. They are taxing the service, not the subscriber's access to such service.

      • But if they're taxing the provision rather than the consumption, doesn't the provision rather than the consumption need to occur in PA?
  • is a government agent
  • Compressed air tax (Score:5, Informative)

    by The Grim Reefer ( 1162755 ) on Wednesday August 03, 2016 @09:02PM (#52640805)
    Does this really surprise anyone since it's coming from the state with a compressed air tax [avalara.com]?
  • Full Text (Score:5, Informative)

    by fulldecent ( 598482 ) on Wednesday August 03, 2016 @09:06PM (#52640839) Homepage

    Full text of enacted bill.

    FULL TITLE: Act 84 of 2016

    EXPLANATION: http://www.revenue.pa.gov/Gene... [pa.gov]

    SUMMARY:
    http://www.revenue.pa.gov/Gene... [pa.gov]

    FULL TEXT:
    http://www.legis.state.pa.us/c... [state.pa.us]

    • by e r ( 2847683 )
      So, some slashdotter had to find links to the explanation, summary, and full text of the law?
      WHAT ARE THE EDITORS EVEN DOING?!
      • What does it matter? No one on slashdot is going to actually read a linked article especially when the summary gives us so many ways to spout of uninformed on a variety of hot button topics.
  • What If they'll start busting people for not paying taxes for all of their torrenting? You know, Al Capone style...
  • That would be simpler and not create a stupid new law that unevenly spreads the tax burden. You know how judges need to have law degrees? Maybe legislators should be required to have economics degrees.
  • Alternative (Score:5, Funny)

    by gumpish ( 682245 ) on Wednesday August 03, 2016 @10:07PM (#52641249) Journal

    It would be amusing if Netflix et al. opted to take a small hit to their revenue and made their services free to all current customers in PA, thus denying the state the taxes they projected.

    • Small hit? Pennsylvania has 12 million people in it. If 15% of them are Netflix subscribers (this would be in line with the national average though it's probably higher- The Philadelphia metro region is along the dense NE corridor) Netflix would be letting about 20 million dollars a month or 240 million a year in cash roll out of the door.
      • Besides the taxes aren't hitting Netflix, they're hitting us the consumers.

        in the end it's going to be just another line on the bill every month.

    • by T.E.D. ( 34228 )

      It would be amusing if Netflix et al. opted to take a small hit to their revenue and made their services free to all current customers in PA, thus denying the state the taxes they projected.

      I don't think it matters, because they can't really make Netflix pay them a nickel if that company has no physical presence in PA.

      Most likely what they will do is make it the consumer's responsibility to report it on their yearly taxes, and pay it then themselves. If PA taxpayers are like those in other states, almost nobody will do this [cpapracticeadvisor.com], so the state still won't get their taxes. In fact, this is already the situation in most states, so this is really just a story about PA jumping on the (already heavily-

  • "Magazine and newspaper subscriptions, as well as digital versions of the Bible" Interesting... somebody needs to create a media container that uses bible verses in place of whatever functions are usually in there.
  • Pennsylvania long the Texas of the East....is fast joining it's northeastern neighbors and becoming more and more like NY and Connecticut. Still not as bad as Connecticut though.

    As for Netflix tax, remember, I already pay a tax on cable internet. There are supposed to be regulations that ensure anti-competitive behavior. But the Commonwealth of PA never acts on them. See, we pay taxes in exchange for certain responsibilities and actions on the part of the government. Problem is, we don't receive those.

    I s

  • by silentcoder ( 1241496 ) on Thursday August 04, 2016 @09:46AM (#52643621)

    Are they also exempting other religious texts ? Is this not a violation of the separation of church and state ? Why not ?

  • Streaming Services are by definition a Service. Other Services in the state are taxed at 6%. Streaming services can be considered a Luxury item, nobody needs netflix to live. You won't die without it.

    the Vaping taxes are essentially the same thing. You don't need to vape. It has health issues just like regular smoking. Kids pick it up as being "cool". Tax it like cigarettes..boom done. I can think of about 5 Vape stores in my town, why on God's green earth do we need 5 in small town? Survival of th

  • As long as they don't tax torrents, I'm OK.

  • Comcast Strikes Back!

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