It’s not a sci-fi horror show, but it is a bit of a mystery.
Subscribers to Netflix in Florida will begin seeing a state tax on their monthly bill beginning Feb. 15. The tax itself is not new and it is not clear why Netflix has only now begun to tack the tax onto subscriber’s monthly charges.
The tax dates back to 2001 on cellphone service and satellite and cable TV subscriptions. As technologies have evolved, so has the services lawmakers include in the tax. In 2012, cable service was redefined as video service. That extended the tax to include both audio and video streaming services.
Enforcement of charging the tax is unclear. The state Department of Revenue declined to answer questions regarding any communications with Netflix regarding the tax, citing taxpayer confidentiality.
Spotify notified its Florida subscribers in 2021 that it would begin collecting the state Communications Services Tax — or CST.
Amazon includes a page describing the Florida tax on its website. “The Florida Department of Revenue has advised Amazon that video rentals are included in the definition of video services. This means some benefits of Amazon Prime may also be subject to CST. As a result, CST will be proportionately applied to Prime for its taxable services,” the page says.
An online discussion board for Apple customers includes several questions by customers started in Oct. 2019 regarding the state services tax showing up on their music subscription bills.
The mystery is why Netflix hasn’t been passing along the tax to its customers. The company didn’t answer that question in a statement emailed to WLRN. The state Department of Revenue didn’t provide any answers either, saying that taxpayer information is confidential.
“The Department audits businesses to find out whether state taxes were collected, reported, and paid correctly,” a revenue department spokesperson wrote when WLRN asked how the state determines if a company is in compliance with the state tax.
The state portion of the tax is 5.07%. “The Florida communications services tax must be separately itemized on the customer billing,” according to the state revenue department’s website. Companies may not “absorb or relieve the customer of all or any part of the Florida communications services tax.”
Hundreds of local governments in Florida add their own communications service tax to the state charge. Most communities levy 5.72%.
“Netflix subscriptions in Florida are subject to both local and state tax as part of the Florida Communications Services Tax,” a spokesman wrote to WLRN in an email.
The tax has helped drive state revenues. It brought in almost $700 million last fiscal year. The tax revenue category that includes streaming media services has grown by double digits seven years in a row. State budget estimators anticipate that growth to slow to under 10% this fiscal year.
Lead image: Sofia Vergara as infamous Miami drug lord Griselda Blanco in the talked-about new Netflix series “Griselda.” Elizabeth Morris/Netflix © 2023