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Cord-cutting leads to falling cable taxes, states to take action

Mar 31, 2021 9:53:10 AM

In just 2020 alone, more than six million Americans nixed cable service in favor of getting content from a streaming platform. Some of the reasons include a desire to save on the cost of a costly cable package, lack of interest in much of what cable offers, and increased content quality from competitors.

But while this trend offers consumers the choice and selection they want, there’s a downside for state and local governments that depend on taxes gathered from cable bills. This can be a significant loss of revenue. And as state and local coffers have taken a hit due to the pandemic, government is looking to make up those monies.

Many communities are starting to propose taxing streaming services, such as Netflix, Spotify, Hulu, and Disney+. These proposals will certainly result in protracted legal battles and a heck of a fight from these services. 

The key takeaway is that local government’s should no longer depend on growing remittances from taxes on cable. Instead, focus on growing revenue through other sources, such as business development, as well as ensuring current taxes are paid accurately.


Our revenue discovery system will examine your receivables, including all cable and utility user fees, is critical to making sure a municipality secures what it can to stabilize revenues.

Reach out to our team to learn how our 360 Degree Revenue Cloud approach can pay off for your community.

Review some of the latest stories on this developing issue:

CNBC, 2/24/21 The Netflix and Spotify tax: States are making streaming services more expensive

The Wichita Eagle, 1/13/21 Kelly budget proposes tax on Netflix, Hulu, other streamers and some online merchants

The Bangor Daily News 2/13/20 Maine could become latest state to tax Netflix and other streaming services

MarketWatch 11/3/20 Canada proposes tax on streaming companies

Miami New Times 2/10/21 Your Spotify Bill Probably Just Went Up Nearly 15 Percent. Here's Why.

Bloomberg Tax Streaming ‘Netflix Tax’ in Colorado Raises Risk of Litigation

Hollywood Reporter 1/7/21 Netflix, Hulu Can't Hide Behind Internet Tax Freedom Act in Missouri Fee Fight

Discover why Azavar's 360 Degree Revenue Cloud approach can help your government manage and maximize local revenue.

Shylo Bisnett

Written by Shylo Bisnett

Shylo Bisnett is a Content Marketing Specialist at Azavar and Localgov. In addition to managing a career as a freelance strategic writer, she also founded and chaired a local not-for-profit organization geared toward building relationships among residents, elected officials, and non-governmental organizations.