Netflix Tax Added To Subscriber Fees But There’s A Catch

The Netflix tax will add an additional flat 7.44 percent charge to the current subscription price. Since this is a tax and not a fee, Netflix can’t absorb the cost on behalf of the customer and must comply with both local and state tax laws as per CST regulations. 4.92 percent of the tax will be applied to the CST, while the other 2.52 percent will account for gross receipts taxes.

To be transparent, Netflix emailed their Florida customers to let them know there will be a price increase on their next invoice.

The email directs their customers to the Netflix help center, which has an FAQ page for whatever common tax related inquiries they may have. The comprehensive breakdown about various state and local tax regulations can be found on this page, as well as instructions on how to view and print an invoice.

Netflix also has a disclaimer on their site warning customers that tax rates are subject to change over time.

It’s worth noting, however, that Netflix isn’t trying to make a quick buck off of this new charge, but rather collecting for the CST and transmitting the funds to the agency accordingly.

While it may seem like a slap across the face because the streaming giant raised their prices in January, it’s an unavoidable price increase for Florida customers because of the state tax regulations that are currently in place.

To calculate the Netflix tax ahead of receiving the new invoice, Florida customers can simply apply the 7.44 percent rate to the subscription price they’re currently paying. Aside from the added tax, subscription prices will remain the same for the time being.

Presently, Florida is the only state that has a Netflix tax. Though we can’t say for certain that this will always be the case, no other state in the US will be affected by this upcoming price increase as of this writing.

Given how proactive Netflix has been with communicating these new charges to their Florida subscribers, it’s unlikely that customers in other states will be surprised with an additional charge on their invoice without first hearing from Netflix.

Netflix currently has three different service tiers to consider, all of which will be subject to this new tax in Florida.

So if Florida residents want to offset their monthly charges by downgrading to a cheaper package, they very well can. At the time of this writing, the ad-supported tier costs $6.99, the standard (and most popular) costs $15.49, and the premium plan costs $22.99.

Source: WTSP