'Netflix Tax' Proposed In Massachusetts

DEDHAM, MA — With cable prices high and more and more options coming to streaming, plenty of Massachusetts residents have cut the cord and turned to services like Neflix and Hulu to watch their favorite shows. But many state legislators believe streaming companies aren't paying their fair share to communities in the same way cable companies do. Rep. Paul McMurtry, a Dedham Democrat, filed a bill to charge a fee on streaming services that would be split between the state, municipalities and local cable access stations.

The bill, HD 4389, filed Thursday, called for requiring streaming companies to pay 5 percent of their revenue earned in Massachusetts. Streaming providers that make under $250,000 in revenue per year would be exempt.

If it passes, the bill will split the fees three ways. The state would get 20 percent, cities and towns would get 40 percent, and community access stations would get 40 percent. The bill hasn't been referred to committee yet but already has bipartisan support, with 86 legislators from both parties signing on as co-sponsors, according to McMurtry's office.

"Multimillion-dollar media companies are using our public rights of way to deliver their product, yet are not paying their fair share for that use," McMurtry said in a statement. "Fees charged to traditional cable providers support our local community media centers which are an important resource to local public, educational, and government news and information. As consumers are offered alternative streaming methods, we need to modernize our law to assure that community media centers are supported."

McMurtry added that cable access stations, like Dedham TV rely on the support of franchise feese from the cable companies. He praised Dedham TV for keeping the community informed on local issues.

"They have been a consistent source of local public, educational and governmental news for a long time and have allowed the residents of Dedham to stay up-to-date on important local issues and news," McMurtry told Patch. "The programming they provide is invaluable to our community and that’s why we need this legislation, assuring they continue to see the funding they need as consumers shift to digital streaming services."

McMurtry filed the bill on behalf of MassAccess, an organization that works to support local community access. According to MassAccess, the number of state households with cable dropped by 7 percent between 2015 and 2018. MassAccess said streaming companies make millions from the same local infrastructure as cable, but are not subject to the same regulations. The organization added that community access are not the only ones hurt by the loss of revenue from people switching because cities and towns also receive a percentage of franchise fees from cable companies for local projects.

"For decades, the funding provided by cable companies has helped provide funding to support vital programs at the municipal level — including community media centers and PEG channels," said Melinda Garfield, president of MassAccess. "Community Media centers and PEG channels serve the community, they are an important and vital resource that we need to protect."

Chicago passed a similar "Netflix Tax" back in 2015, requiring a 9 percent tax on streaming subscriptions.