Tax On Streaming Queued Up in Connecticut

Last week, Connecticut’s Energy and Technology Committee discussed an expansion of the existing gross earnings tax on satellite and cable television service providers to now include communications service providers – which would affect the major streaming services.

House Bill 5446 has received Democrat support in the legislature, but Republicans are expressing concerns about the cost increase for service providers and consumers alike.

“If you increase the cost of doing business, if you impose an earnings tax, then you are also going to see that cost translate to higher end-use prices for the consumer,” Senator Ryan Fazio (R) said regarding the possible effects of the bill.

But the rightfully hesitant Republicans aren’t the only ones opposed to the measure, as a handful of communications providers have submitted testimony against the bill, citing that the proposed tax would force consumers to pay more for their services.

Tammy Cota, executive director for The Internet Coalition, argued in her testimony that the bill would “absolutely burden consumers, particularly those who rely on internet platforms for entertainment, news, and education.” Cota said further, “The internet has become an integral part of people’s daily lives – individuals and families – as a free/affordable and convenient way to access a wide range of content.”

Cable and television companies in Connecticut have been subject to a 9% gross earnings tax rate since 1965; the proposed measure would set a rate of 5% for communications service providers.

Connecticut legislators should be clear, HB 5446 would ultimately be a tax on consumers, at a time of high inflation and rising costs for streaming services.