NY Democrats propose 4% tax on Netflix, Uber to fund MTA
Netflix could get a whole new premium.
Albany lawmakers in the Assembly have floated potentially hitting streaming services like Netflix, Hulu and HBO Max with the state’s sales tax as one way to fund the cash-strapped Metropolitan Transportation Authority.
The plan would hit streamers with the 4% surcharge, potentially netting $100 million annually for the state’s coffers, the Assembly’s budget proposal predicts, putting a new + on bills for everything from AppleTV+ to Paramount+.
“A new tax on digital streaming services demonstrates how tone-deaf Democrats are to the affordability issues New Yorkers face,” said Assembly Minority Leader William Barclay (R-Syracuse).
“We’re in a unique position of having strong revenues already coming into the state,” he added. “But here we are, poised to add another tax that raises costs on millions of New Yorkers.”
The MTA needs $600 million this year and at least $1.2 billion next year to balance its books in large part because of the ridership drop-off following the COVID-19 pandemic.
That dollar figure includes an assumption the MTA hikes transit fares to an estimated $2.90 per swipe this year — with another fare increase set for 2025.
A previous rise set for 2021 was canceled due to COVID-19.
MTA budget documents show that the fare hike bundled with a similar increase in commuter rail prices and bridge and tunnel tolls will raise an estimated $300 million annually.
Lawmakers, however, have loudly complained about the planned hike in subway and bus fares and demanded the agency change course.
Expanding the state sales to streaming services is supposed to fill the gap, Assembly boosters said.
This proposal is not included in the state Senate’s budget response, nor has Gov. Kathy Hochul endorsed it.
The governor backs increasing the state’s controversial payroll tax on major downstate employers and forcing City Hall to pay an extra $500 million annually for student MetroCards and paratransit services.
Meanwhile, the state Senate supports taxing corporate profits and forcing the City Council to create a residential parking permit program, which key members of the Council bitterly oppose.
“The reality is that the first order of business is to ensure the MTA is running efficiently and providing quality service,” said Andrew Rein, the president of the Citizens Budget Commission. “If the MTA leadership and labor did what they should on improving efficiencies, we would be having a radically different discussion about where the rest of a stabilization plan could come from.”
Rein wants lawmakers and Gov. Hochul to demand that the MTA develops a plan to shave its operating costs by as much as $1.3 billion annual savings over the long term by reforming labor work rules and finding other efficiencies.
MTA officials have promised to deliver $400 million in savings, roughly one-third of what Rein says they can come up with.
Lawmakers and Hochul must hammer out a deal before the current state budget expires on March 31.
