2018 General Assembly

Va. bill would tax streaming services like Netflix

RICHMOND, Va. (WRIC) -- Virginia lawmakers have put forth thousands of bills this General Assembly session.

One has opponents pressing pause.

HB1051 would apply the Communications Sales and Use Tax to services related to the streaming of audio and visual data.

It's been dubbed the "Netflix Tax."

"The Democrats are bringing forth the Netflix Tax. They want to tax all the streaming services so that's Netflix, Hulu, all the things that I think everybody under 30 and even some of us over 30 use. I think it's a tragic mistake," said Del. Tim Hugo (R-Fairfax).

It was introduced by Del. Vivian Watts (D-Fairfax).

"It's all about fairness," she said.

Right now, that tax already applies to things like cable TV and satellite radio.

But streaming services aren't included.

Watts said outlets should all play by the same rules.

"This is what we are trying to define so that we have an equal playing field in all of the ways in which this infrastructure allows you to communicate," she said.

But Hugo said it's not necessary.

"I think we're taxed enough. We don't need to raise taxes. What we need to do is spend wisely," he said.

Watts admits she doesn't think her bill will get enough support to make it through this year.

House Republicans have shot down more than $30 billion in tax increases over the last 15 years, according to their spokesperson.

But Watts said it's something worth considering in the ever-evolving technology landscape.

"It's an important dialogue that we need to engage in for fairness amongst all of the ways in which we communicate," she said.

The proposed legislation would bring in nearly $8 million a year to localities that receive a Communications Sales and Use Tax distribution, according to the impact statement submitted with the proposal. That would begin in fiscal year 2019.

The bill will go before a House subcommittee next week.

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