Democrats in the New York State Assembly are reportedly considering a proposal that would levy a 4% state sales tax on streaming services like Netflix, Hulu and Disney+ in an effort to help the Metropolitan Transit Authority (MTA) avoid a fare hike.
According to the Wall Street Journal, the first to report the story, officials are also weighing increasing corporate taxes to 9.25% on businesses reporting more than $5 million of income and a 25-cent surcharge on package deliveries. Meanwhile, a separate proposal from Democrats in the New York State Senate would tack a 50-cent surcharge on ride-hailing trips.
Lawmakers estimate that the streaming tax could eventually raise more than $100 million a year. The corporate tax hike is expected to generate $865 million in the first year – the majority of which would reportedly go to the MTA – while the package and ride-hailing surcharges could potentially raise another $300 million and $240 million, respectively.
The New York State Assembly is looking to offer an alternative to Gov. Kathy Hochul’s plan to raise $700 million for the MTA by increasing payroll taxes.
The MTA has projected that it would need over $1 billion to keep its subways, buses and commuter trains running. The agency approved a $19.2 billion operating budget for 2023, which anticipated a 5.5% fare increase that would raise the cost of a subway ride to $3 from $2.75.
The current state budget is set to expire on March 31.
A spokesperson for Hochul told TheWrap that the Executive Budget makes “transformative investments to make New York more affordable, more livable and safer” that she looks forward to working with the legislature on a final budget that meets the needs of all New Yorkers.
A Netflix spokesperson told TheWrap that subscribers in New York are already charged a sales tax and a spokesperson for Prime Video declined to comment.
Representatives for the New York State Assembly, the MTA, Disney+, Hulu, HBO Max, Discovery+, Apple TV+ and Peacock did not immediately return TheWrap’s request for comment.