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GOV/MIL Watch what’s next: Georgia might tax Netflix and downloads
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  1. #1
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    Watch what’s next: Georgia might tax Netflix and downloads

    It's not the main point of the story, but their base of 25 Mbps for reasonable internet speed seems a little suspicious. We had 6 Mbps for a long time and was upgraded to 10 Mbps a year ago. It's fine and it's DSL. We don't stream HD TV though.
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    Mark Niesse, The Atlanta Journal-Constitution
    https://www.ajc.com/news/state--regi...fdEWQJTmggvJI/

    Possibly coming soon to a screen near you: a tax on Netflix and just about everything else you download or stream.

    Georgia lawmakers, coaxed by dozens of lobbyists swarming the state Capitol, are pushing for a tax on digital video, books, music and video games.

    That means you’d pay more for Netflix, Amazon Prime Video, Hulu, Kindle e-books, iTunes music, Spotify and internet phone services.

    Legislators and internet providers see it as a giant pool of untapped cash that could be used to subsidize construction of internet lines in economically depressed rural parts of the state.

    Those who are already connected would pay the price: They’d bear the cost of the 4 percent tax, but its benefits would go toward rural residents who lack high-speed access to online products.

    Georgia is the latest state to consider a far-reaching tax on internet services, a virtual gold mine for governments trying to raise money to prop up rural areas that have steadily lost businesses and residents to Atlanta and other cities. Only a handful of other states have imposed this kind of tax so far, but similar proposals have been introduced in legislatures across the country.

    Both Gov. Brian Kemp and Lt. Gov. Geoff Duncan have expressed reservations about the idea.

    The proposal pits current customers against communication companies such as AT&T, who stand to profit because the digital tax would replace existing, higher taxes on cable TV, phones and broadband equipment.

    A rural-urban divide

    About 66 percent of Georgians oppose the idea of taxing internet, TV and phone services to raise money for rural internet, according to a statewide poll conducted last month for The Atlanta Journal-Constitution.

    “We in the city have been taxed enough,” said Beverly Barnes, an Atlanta retiree who was questioned for the poll. “I look at my cable and cellphone bill, and I see we have enough fees. Most people move to the country because it’s cheaper out there. Let them pay for that.”

    But state Rep. Jay Powell, the chairman of the powerful House Rules Committee, said customers have avoided paying sales taxes on digital products, creating inequities between old and new technologies. For example, a book purchased at a store is subject to sales taxes, but a downloaded e-book is tax-free.

    He said those who have high-speed access should pay a tax to support Georgians who lack high-speed internet, which has become a necessity for business, education and health care.

    “We are all part of the same state, and we help each other,” said Powell, a Republican from Camilla. “If Atlanta benefits, then the rest of Georgia benefits. If the rural section of Georgia benefits, then Atlanta benefits. We’re all in it together.”

    Discomfort over new taxes

    Nearly 60 lobbyists for cable, TV and cellphone companies are making an argument that it’s only fair that every service be taxed equally. Currently, various taxes and fees cover cable TV and phones but not satellite TV and internet video.

    The resistance comes from legislators who oppose new taxes, consumers who would pay the tax and Dish TV, which doesn’t stand to benefit from government funding of rural internet since it already provides satellite-based online access to those areas. Before a similar digital tax proposal failed last year, Dish TV ran TV ads urging viewers to “Stop the Georgia TV tax!”

    Legislation for the tax proposal hasn’t been introduced yet in Georgia, but a bill is coming from a group of influential rural House lawmakers who have made internet access a priority. They say the state government needs to spread around some of metro Atlanta’s economic prosperity. Other lawmakers are uncomfortable with the idea of a tax increase.

    For a Netflix customer with a $12.99 monthly plan, a 4 percent tax would cost 52 cents per month, or $6.24 per year.

    Rural Georgians such as Twalla Whitlock, who subscribes to satellite internet service, said they need faster, more affordable internet options.

    “It’s expensive,” said Whitlock, a Brooks County resident who works in social services and responded to the AJC poll. “If they had more towers out here, it would be cheaper. In a lot of areas, they have limited service.”

    The tax, combined with the repeal of existing taxes and fees, would generate $48 million in 2021 and reach $310 million by 2024, according to state estimates. Revenue would be split between state and local governments. The state portion would go into the general treasury, meaning there’s no guarantee it would go to help increase internet access in rural Georgia. The state can’t dedicate funding without changing the state Constitution.

    Without state funding, internet companies say it doesn’t make financial sense for them to expand into less populated areas, where access is spread among fewer customers. State legislators want to subsidize internet companies’ costs to expand into regions that lack broadband service.

    Less access, fewer opportunities

    About 638,000 households — 16 percent of the state — lack access to internet with speeds of at least 25 megabits per second, according to a University of Georgia study.

    Internet speeds in the 25 Mbps range are important to work from home, study online, download files and stream high-definition video, according to the Federal Communications Commission.

    State Sen. Steve Gooch said he wants to find money for rural internet expansion, but he’s not convinced a digital services tax is the way to do it. He said funding could come from an existing fund for landline telephone expansion, and he opposes taxing satellite dishes because they don’t use public rights of way.

    “We should exhaust all options and review our existing tax framework for internet, telephone, broadband and satellite services before making any decisions,” said Gooch, a Republican from Dahlonega.

    State Rep. Viola Davis, a DeKalb County taxpayer advocate before she was elected last year, said she’s skeptical of the proposal.

    “I get real uncomfortable when they want to tax an area and then redistribute that money to another area,” said Davis, a Democrat from Stone Mountain. “If you do the tax, the tax will be on primarily the urban homeowners and users of internet.”

    Similar technologies should be taxed evenly, but it’s often unpopular when elected officials try to put a tax on services such as Netflix that have so far escaped the government’s reach, said John Buhl, a spokesman for the Tax Foundation, a Washington-based think tank. States including Hawaii, Pennsylvania and Washington tax streaming services.

    “People think of Netflix, and they like Netflix, and they say, ‘Why are you trying to tax my Netflix?’ ” Buhl said. “Things that were goods in the past are now services in the digital era, and states need to deal with that. Otherwise, their tax base will get smaller quickly.”

    Georgia already imposed sales taxes on products sold online, which went into effect Jan. 1. But electronic goods remain untaxed.

    Cable vs. satellite

    Cable companies support broadening the tax base among all TV and internet customers — not just those that have cable and are already paying government franchise fees — Georgia Cable Association lobbyist Stephen Loftin said.

    “Clearly, when you’ve got some services that pay a tax and others don’t, there’s an equity situation that needs to be addressed, particularly when the services are indistinguishable to the consumer,” Loftin said. “The only difference is the technology used to deliver it.”

    The Georgia Cable Association’s members include Charter Communications, Comcast and Cox Communications, the cable and broadband internet subsidiary of Cox Enterprises, which also owns the AJC. Cox provides cable, internet and phone services in Middle Georgia, primarily in the Macon and Warner Robins area.

    AT&T is the largest force of the telecommunications industry at the Georgia Capitol, with the biggest service area and the most lobbyists — 23 — according to state ethics commission records.

    It wants any tax on internet services to also eliminate sales taxes on broadband equipment, saving money for telecom companies. A House council of rural legislators included the elimination of broadband equipment taxes in its recommendations.

    “The state’s first step to spurring broadband deployment should be eliminating government-imposed economic and procedural hurdles that stifle private capital investment,” AT&T spokeswoman Ann Elsas said. “Once that has occurred, the state can assess the need for any additional steps like supplementing federal efforts to help enhance broadband deployment in hard-to-reach, high-cost areas.”

    Netflix didn’t respond to requests for comment. Comcast referred questions to the Georgia Cable Association.

    Dish, the satellite TV and internet provider, characterized the tax as a handout for “big cable.” Dish spokeswoman Karen Modlin said the company is the only statewide provider of video and broadband, without having to use local infrastructure.

    “We hope that the Legislature will recognize that innovation can be achieved without saddling satellite customers with new and unwarranted taxes,” Modlin said.

    Charlie Hayslett, the former owner of an Atlanta-based public relations firm who is writing a book about the divide between metro and rural parts of Georgia, said the tax plan for rural broadband could be an expensive waste of money.

    While internet service is important for rural Georgia, he questions whether a government subsidy would solve the area’s connectivity problems.

    “I’m all for helping rural Georgia,” Hayslett said, “but I’m also tired of being asked to sit in gridlocked traffic while the General Assembly uses my tax money to buy a pig in a poke for South Georgia.”
    Last edited by 1911user; 02-11-2019 at 03:30 PM.

  2. #2
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    We already pay an internet tax in GA as part of the cable bill.

    They are proposing an additional tax on top of that internet tax by calling it a internet video tax.

  3. #3
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    Quote Originally Posted by 20Gauge View Post
    We already pay an internet tax in GA as part of the cable bill.

    They are proposing an additional tax on top of that internet tax by calling it a internet video tax.
    Thank you. It’s already taxed. Screw them and the horse they rode in on.
    The Operative: “The path to peace is paved with corpses. It’s always been so.”

    Malcolm Reynolds: “So me and mine got to lie down and die so you can live in your better world?”

  4. #4
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    Quote Originally Posted by 20Gauge View Post
    We already pay an internet tax in GA as part of the cable bill.

    They are proposing an additional tax on top of that internet tax by calling it a internet video tax.
    They said in the OP:

    “The proposal pits current customers against communication companies such as AT&T, who stand to profit because the digital tax would replace existing, higher taxes on cable TV, phones and broadband equipment.”

  5. #5
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    I could about guarantee that one tax would be "in addition to" and not "replace existing higher taxes". They never have enough money!
    Our GA legislators are also seeking an annual raise of almost $40,000. I may have to relocate across the river to AL if they keep it up!
    Sherry in GA

  6. #6
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    First off let me state I hate taxes and rather then raising taxes I wish that they would cut spending and services.

    But I am going to say that I am in support of this tax the way I understand it. When you subscribe to netflix you are basically buying a product, the right to stream from netflix, for a month. Why is this any different then going to a local store and buying a product like tp. Or buying a product from amazon or other internet store. Internet taxes seem to be here to stay. So IMO buying a digital copy of an item should be treated just like buying a physical copy. So for buying an ebooks. A book is a book

    Now with netflix do you really buy anything or are you just using a service. Georgia has a list of taxable services such a going to see a ball game, sales of admissions. So watching a movie is no different between a movie theater or watching it on your couch.

    Again to any georgia government folks reading this "cut spending and services and lower our taxes"

    tbd

  7. #7
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    Quote Originally Posted by Kris Gandillon View Post
    They said in the OP:

    “The proposal pits current customers against communication companies such as AT&T, who stand to profit because the digital tax would replace existing, higher taxes on cable TV, phones and broadband equipment.”
    They said....... it won't...... When have you ever hear of them dropping a tax?

  8. #8
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    Quote Originally Posted by Sherrynboo View Post
    I could about guarantee that one tax would be "in addition to" and not "replace existing higher taxes". They never have enough money!
    Our GA legislators are also seeking an annual raise of almost $40,000. I may have to relocate across the river to AL if they keep it up!
    Agreed, look at how they just drool over the amount it would raise. There is no real number on what they would "eliminate" in taxes.... that indicates they won't

  9. #9
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    Quote Originally Posted by twobarkingdogs View Post
    First off let me state I hate taxes and rather then raising taxes I wish that they would cut spending and services.

    But I am going to say that I am in support of this tax the way I understand it. When you subscribe to netflix you are basically buying a product, the right to stream from netflix, for a month. Why is this any different then going to a local store and buying a product like tp. Or buying a product from amazon or other internet store. Internet taxes seem to be here to stay. So IMO buying a digital copy of an item should be treated just like buying a physical copy. So for buying an ebooks. A book is a book

    Now with netflix do you really buy anything or are you just using a service. Georgia has a list of taxable services such a going to see a ball game, sales of admissions. So watching a movie is no different between a movie theater or watching it on your couch.

    Again to any georgia government folks reading this "cut spending and services and lower our taxes"

    tbd
    I think you are missing the point. This is not a plan to improve the lives of the people of Georgia, but rather a method to increase tax revenue.

    I can think of 1,000 reasons most any day to raise taxes. This is a case of wanting more revenue for the state and creating a neat package in order to justify doing so. We pay taxes on the internet. Check your bill. That service charge is there. By your logic, we could justify taxing just about anything else in this world.

    Use air? Tax it.
    Like the view? Tax it.
    Have snow? Tax it...... it never stops.

  10. #10
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    Quote Originally Posted by 20Gauge View Post
    I think you are missing the point. This is not a plan to improve the lives of the people of Georgia, but rather a method to increase tax revenue.

    I can think of 1,000 reasons most any day to raise taxes. This is a case of wanting more revenue for the state and creating a neat package in order to justify doing so. We pay taxes on the internet. Check your bill. That service charge is there. By your logic, we could justify taxing just about anything else in this world.

    Use air? Tax it.
    Like the view? Tax it.
    Have snow? Tax it...... it never stops.
    Nailed it. Here, they have started taxing us for out of state purchases, where no sales tax was paid. (neighboring NH has no sales tax) They have also prohibited online liquor sales from being shipped into the state. Anything to boost the Gov coffers, which they will then piss away on welfare services, or importing illegals.
    The word RACIST, and the ability to debate race-related issues rationally, are the kryptonite of white common sense.

    After the first one, the rest are free.

  11. #11
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    I am getting disappointed in the Republicans in this state. Even at the county level they are talking "big" plans for expansion of revenues, building projects with no real purpose except having someone's name on it, (mainly schools), and all other sorts of revenue enhancing methods.

    I swear they are becoming Democrats in the 1980s vein.....

  12. #12
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    Quote Originally Posted by 20Gauge View Post
    I think you are missing the point. This is not a plan to improve the lives of the people of Georgia, but rather a method to increase tax revenue.

    I can think of 1,000 reasons most any day to raise taxes. This is a case of wanting more revenue for the state and creating a neat package in order to justify doing so. We pay taxes on the internet. Check your bill. That service charge is there. By your logic, we could justify taxing just about anything else in this world.

    Use air? Tax it.
    Like the view? Tax it.
    Have snow? Tax it...... it never stops.
    I did not miss the point. And I stated several times in my post that I hate taxes and wish that they would stop raising them. But I also do not see a difference between an e-book and a physical book and I think that if one is taxed then the other should be taxed also.

    IMO - this tax is not about rural broadband but a general revenue grab. And living in a rural area we need better and faster internet. I have fiber to the house because of my location near a road that has an electric substation down near the end of the road. But to get fiber to the house I had to install it myself and then the electric co-op did the final hookup. My neighbors who live behind me don't because they live on a different street and to run fiber to them would cost several thousand dollars. Folks who live on the same road as the substation but past the substation don't have fiber because the co-op didn't run the fiber past the substation for them to hook into. Myself and about a hundred other familys happen to be in a sweet spot but I'm sure that most of them don't have the ability or desire to run a 1/2 mile plus of fiber to their home for internet. Plus the co-op never publicized this, self install, as an option and I got lucky in talking to the right person at the right time when needing it to work from my home.

    Hopefully 5g will solve the highspeed rural internet problem by making it such that wires do not need to be run the last mile to the house. This is where the rural internet money needs to be directed as it would be a very cost effective way to solve the problem. A 5g cell tower and a 5g internet modem in the home for wired lan. Then little 5g usb plug-in's for mobile laptops like they sell for wifi. Piece of cake.

    tbd

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