You Might Have to Start Paying a "Netflix Tax" Soon

Say it ain't so.

If you live in Pennsylvania, you're going to have to start paying up when you binge-watch. CBS Pittsburgh (opens in new tab) reports that starting August 1, Netflix users in the state will have to pay an additional tax on their subscription.

The tax isn't just on Netflix, though; it's also on sites like Hulu, plus music, e-books, apps, online games, and even ringtones. If you use an account with a Pennsylvania billing address, you'll have to pay a six percent sales tax. The tax doesn't apply to charitable purchases, school books, newspaper subscriptions, or digital downloads of the Bible.

According to PennLive.com (opens in new tab), the new tax is the state's attempt to make up for a $1.3 billion hole in its budget. Cigarette smokers will also have to pay $1 more per pack as part of the overall tax hike. The digital download tax could bring in nearly $47 million to the state.

Pennsylvania isn't the only place where Netflix streamers will have to pay up. Back in September, Chicago residents sued (opens in new tab) to challenge a similar tax on online services. And that's on top of a recent price hike for many Netflix users worldwide, which even prompted its own lawsuit (opens in new tab). But hey, Netflix is still cheaper than a cable subscription.

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Megan Friedman
Megan Friedman

Megan Friedman is the former managing editor of the Newsroom at Hearst. She's worked at NBC and Time, and is a graduate of Northwestern's Medill School of Journalism.