Netflix users in Kentucky have one less tax to worry about today. The Kentucky Board of Tax Appeals recognized that streaming services are not taxable as “multichannel video programming services.”
Stating that the board is bound by the words of the Kentucky legislature, the Board of Tax Appeals sided with Netflix in its decision. The BTA explains, “The Board concludes that if streaming services fit within the Kentucky statute’s definition for “multichannel video programming,” then Netflix would be a provider of “multichannel video programming services” for purposes of Kentucky tax law, regardless of its status under federal law for regulatory purposes.”
In the state of Kentucky, “cable services” must be transmitted by facilities owned by a “communications service provider.” Netflix, and other streaming services, do not use such services to provide content transmission. The BTA concluded that because of this, Netflix does not provide taxable “cable services” and is not subject to such a levy.
Taxation on streaming services has been a subject of controversy as of recent. In the city of Chicago, the comptroller recently applied an “Amusement Tax” to online streaming services, including Netflix. Several residents filed a lawsuit against the city regarding the tax increase, claiming that the streaming services do not fall under the services outlined in the “Amusement Tax.” Hopefully, the city is able to fall in the footsteps of Kentucky and eliminate these unnecessary burdens on taxpayers.