They won’t be happy until they tax us for everything. Well, if you live in Pennsylvania, your Netflix subscription is about to cost more. The state has implemented what’s being referred to as the “Netflix tax.”
It is basically an extension of Pennsylvania’s six percent sales tax to digital downloads as well as online subscription services like Netflix.
This six percent sales tax is going to apply to all streaming and downloads for e-books, music, and applications. The same goes for music streaming services like Netflix rival Hulu. Is anything exempt? Only digital versions of magazines, newspapers, and the Bible. So Pennsylvania has joined the handful of states that have taxed digital services.
Minnesota taxes digital services, while Chicago already imposes a nine percent “cloud tax.” There is a workaround, and it may not be completely illegal, but it is a gray area. The tax is charged when the customer is using a billing address that’s located in a city or state where digital services are taxed. To avoid the Netflix tax, many think you can borrow a billing address that’s outside of Pennsylvania. Again, not completely illegal, but who knows? Yet another tax, but what can you really do?