Lawmakers on Maine’s Taxation Committee will hold a work session Tuesday to debate the merits of LD 2011, “An Act To Update Certain Provisions in the Income Tax and Service Provider Tax Laws.” The bill, submitted for consideration by the Department of Administrative and Financial Services and sponsored by Taxation Committee co-chair Rep. Ryan Tipping of Orono, would make digital streaming subject to the same taxes the state levies on phone and internet service and video rentals. The work session is scheduled for 1 p.m. in Room 127 of the State House.
Millions of Americans and thousands of Mainers use streaming services like Netflix, Amazon, Hulu, Disney+ and others. According to Flixed, a company that simplifies “cordcutting” for consumers, or the cancelling of cable subscriptions, Netflix has solidified itself as the most popular streaming service on the market.
In 2009, Netflix surpassed 10 million subscribers. A decade later in 2019, more than 150 million people worldwide were subscribed to the service. Not far behind Netflix is Amazon Prime Video, which had an estimated 100 million subscribers as of 2019. Third among all streaming services is Hulu with 28 million, but its live television streaming service, Hulu Live TV, topped all tv streaming services in 2019 with 3.2 million subscribers, beating out Sling TV, YouTube TV and other services.
According to DAFS, it’s estimated the streaming tax outlined in LD 2011 would generate $3.7 million in 2021 and nearly $6 million by 2023. As highlighted by the Bangor Daily News on Feb. 13, a Netflix subscriber paying $12.99 per month would pay an additional 78 cents on that bill, or a six percent tax.
If passed, Maine would join 22 other states and the District of Columbia in taxing streaming services. A tax on streaming services was previously proposed by former Governor Paul LePage in 2017 in exchange for cuts to the individual income tax, however that effort was unsuccessful.
“At a time with surpluses in the state budget, I don’t think we need to raise more revenue,” Sen. Matthew Pouliot told the Bangor Daily News.
Sen. Pouliot is right. When you take into consideration Governor Mills’ promise not the increase taxes in her two-year budget, and this bill being incorporated in her supplemental budget proposal, the streaming tax outlined in LD 2011 is a head-scratcher. At a time when the state is taking in more money than anticipated, it makes no sense to increase the tax burden on hardworking Mainers.
