If you're a Netflix user in Pennsylvania, we have some bad news: your Netflix subscription is about the start costing more, thanks to a change in tax laws in your state.
Pennsylvania has a 6% sales tax, but that tax did not previously cover digital downloads and streaming services. That's changed, thanks to a new revenue package passed by the legislature and signed into law by Governor Tom Wolf. Pennsylvania residents will now have to pay that same 6% tax on their streaming subscriptions.
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.
Keystone State lawmakers didn't just pass the law for fun, of course. 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.
Pennsylvanians aren't the first to have to pay up to keep streaming. Similar taxes already exist in Chicago and Minnesota, as well as in parts of Canada. With an increasing amount of commerce taking place online and involving digital goods, it's likely that this tax is a sign of things to come.