Streaming Tax, How Global Streaming Taxes Shape the Industry

Streaming has taken over many mediums within the entertainment industry. As it has, governments have scrambled to keep up with legislation and taxes. A streaming tax has begun to appear in different states and internationally.

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U.S.A.

California and Florida have begun to utilize existing entertainment, broadcasting or communication taxes to tax streaming platforms or have written new legislation to accomplish the same. In other states, like Arkansas, streaming platforms have successfully argued that they do not need to pay the standard five per cent sales tax as they do not utilize standard broadcasting infrastructure like television cables or radio towers. Streaming platforms also argue in the U.S. that they create content in America and therefore stimulate the industry already.

Federally there has been little to no success in creating a standard tax for streaming platforms. Nor has there been legislation to force the streaming platforms to follow guidelines to stimulate the industry. Other countries have implemented federal taxes or streaming guidelines for operating in their nations. Australia, Canada and the U.K. have each implemented legislation to force streaming platforms to invest in their own industries and incentivize local programming and creators.

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Australia

In Australia, legislation is being discussed to place quotas on the minimum amount of investments made by streaming platforms and the amount of their content that is local. How much must be created locally or purchased from local creators is a part of the discussions being held. Although this legislation heavily influences video streaming, it has led to discussions about streaming in the music industry and the need to highlight Australian creators and stories.

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Canada

In Canada, there has been a tense debate over the need for regulations, incentives and/or taxes to force streaming platforms to stimulate the Canadian entertainment industries and highlight Canadian creators and stories. Canada has introduced a new law that updates the mandate of their regulatory board, the Canadian Radio-Television and Telecommunication Commission (CRTC). This new bill, the Online Streaming Act, tasks the CRTC to discuss with industry leaders the issues and methods needed to strengthen the Canadian industry. One new policy the CRTC has implemented is a five per cent tax on music streaming.

Streaming services are appealing to the Canadian courts and lobbying the government to overturn the tax which will begin in the 2024-2025 broadcast year. Some like Professor Michael Geist, Chair of Internet & E-com. Law at the University of Ottawa, suggests that this tax will lead to retaliation by the U.S. while others like Bloomberg’s Daniel Xu say this tax will lead to American policymakers legislating their taxes. And, as stated above, some U.S. states have already set taxes on streaming platforms.

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U.K.

The U.K. has gone in a different direction. Instead of taxing streaming platforms, they have increased funding to public broadcasting groups. In addition, they have mandated streaming platforms offer U.K. radio and audio broadcasting on their platform in full. The U.K. government has also streamlined and reduced red tape in an effort to make its programming more competitive. The reductions will also lessen regulations on radio content and clarify the need for national and local news.

“This is simply another battle being fought between corporations and governments…”

For big streaming companies to contribute more to local economies and ensure their wealth trickles down to their consumers.  Many European nations are attempting similar legislation and tax policies to force these large companies to contribute to their nations. This is simply another battle being fought between corporations and governments over how much a company can earn without contributing to society.