The popular, but controversial in recent years, streaming service, Netflix, has announced that they will be rolling out an additional tax that all Florida-based subscribers will be subject to in just a few days. Just last week, Netflix sent an email notification to all Florida subscribers saying that they will be charged with an additional state services tax. This new tax will appear on monthly bills starting on February 15th. The tax is more formally known as the communications services tax. This was set by the state with a 5.07% tax rate.
Netflix sent a notification just two weeks before the tax will hit accounts.
According to a statement from a Netflix spokesperson, the tax will hit accounts given the fact that subscribers are subject to local and state taxes, and this tax is a state-issued one. Netflix is actually late to the game in charging its subscribers the communications services tax. Other streaming platforms such as Disney+ and Hulu already charge the tax. The tax is actually one that is much older than many may think, having started in action in 2001.
The tax is meant to be one that is charged for any sort of communication service provider in the state. This includes cable TV companies, satellite TV companies, and any sort of streaming service. This means video, music, and film/TV streaming sites are meant to charge this tax. The company is supposed to collect the tax and report it to the IRS.
When asked why they have not charged the tax before, Netflix denied response.
The streaming platform has already had a number of controversial occurrences with regard to how they charge their customers, as they changed their policy in 2023. They only allowed customers to have accounts in use from one home IP address, and in order to use the account in other locations, customers would be subject to an additional fee. This left many upset and canceling their services with the streaming platform.
The tax rate is now set at 7.44%. This consists of 4.92% state tax rate and 2.52% gross receipts taxes (which is made up of 0.15% + 2.37%). Additionally, local taxing jurisdictions also may subject further tax rates. Netflix’s announcement confirmed that the tax will be shown as an itemized item on a customer’s bill.