Republican Governor Glenn Youngkin wants to create a new tax on your Netflix subscription. The governor calls it a "tech tax," capturing a sales tax on your download of Microsoft Word or your subscription to Spotify. His proposal applies state and local sales taxes to a new category of "digital personal property,"
"He's trying to shift Virginia away from the income tax and more to a sales tax, and in order to do that he needs to broaden the sales tax base." says Derrick Max. Max is president of the Thomas Jefferson Institute. "And one way to do that is to treat digital end-use products in the same way as you do hard copies of those same kinds of products."
Jarad Walczak at the Tax Foundation says the governor is trying to modernize the sales tax to catch up with consumers.
"A tax on consumption is more economically efficient than income taxes, and it has eroded because we have changed the way we consume," Walczak says. "There's no good argument for why buying a DVD should be taxable but paying for a Netflix subscription should not."
Some states have carved out an exemption for online subscriptions for newspapers, one example of the details that members of the General Assembly will be asking when they consider the governor's new tech tax in January.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
