Legislators in Georgia are pushing for a 4% tax on Netflix (NFLX), Amazon Prime Video (AMZN), Spotify (SPOT) and other internet-based services, to subsidize construction of internet lines in economically depressed rural parts of the state, according to media reports on Tuesday.
State Rep. Jay Powell, chairman of the House Rules Committee, argues that because customers have avoided paying sales taxes on digital products, there is an imbalance between old and new technologies. For example, while a physical book is subject to taxes, an ebook remains tax-free.
State Sen. Steve Gooch, however, remains unconvinced a digital services tax will be enough to expand internet access in the state, adding that funding may come from an existing fund for landline telephone expansion.
Only Hawaii, Pennsylvania, and Washington have imposed such tax, but similar proposals have been introduced in legislatures nationwide. The digital services tax could generate about $48 million by 2021 and reach $310 million by 2024, according to state estimates.