Thousands of Idahoans closer to April 1 tax cut

Thousands of Idahoans closer to April 1 tax cut

by
Dustin Hurst
March 13, 2015
Dustin Hurst
Author Image
March 13, 2015

Hundreds of thousands are closer to an April 1 tax cut.

The Senate Local Government and Taxation Committee approved legislation Thursday afternoon that would end taxes on media streaming subscription services, a levy applied to customers of companies like Netflix, Spotify, Pandora and Hulu.

If the bill wins approval on the Senate floor and a signature from Gov. Butch Otter, the tax would end April 1.

If that happens, it would save taxpayers approximately $331,000 through the fiscal year’s end, June 30. Or so officials think.

Though the tax applies in theory, no one is sure if companies or consumers are actually remitting it to the state. The Idaho State Tax Commission cannot legally disclose that.

Only Netflix applies the tax to customers’ bills. That’s due to an odd quirk that requires only companies with a physical footprint to charge the tax.

Netflix runs a DVD shipping facility in the Boise area.

Customers of companies without a footprint, like Hulu, Spotify or Pandora, are required to pay the levy with their annual income tax payments. Agency officials admit, though, few Idahoans pay that tax.

Jason Kreizenbeck, the lobbyist presenting the bill, said his measure would treat streaming services as just that -- services. That’s an important distinction because Idaho doesn’t typically tax services.

If the Senate approves the measure and Otter signs it, taxpayers would save at least $1.5 million next fiscal year.

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