State Rep. Mike Harris this month championed the House passage of his plan to prevent local governments from imposing taxes on streaming services like Netflix, Disney+ and Peacock, ensuring costs remain as low as possible for families and protecting residents from unfair fees..

Local governments currently tax cable companies who use rights-of-way areas to install physical infrastructure to extend cable services to the home. The cable companies are then allowed to directly charge customers for the tax imposed by the local municipality. As people turn away from traditional cable in favor of online streaming platforms, municipalities have begun exploring a convoluted way to tax streaming service customers, even though there is no physical infrastructure required to utilize the services.

“Easy access, limitless choices, and exciting new content all contributed to the extraordinary rise of streaming services. However, that rise to the top hasn’t come without critics,” said Harris, R-Waterford. “With the popularity of cable TV dwindling, local governments are seeing revenue streams dry up. Instead of finding reasonable ways to replace the revenue or cut back, many locals are embracing a backwards strategy of imposing cable-style taxes on streaming services, even though the streaming platforms require no physical infrastructure similar to cable companies. “

Harris said that local governments imposing this sort of tax on streaming services would lead to higher costs for everyday people.

“These taxes won’t affect Netflix or Disney, instead they will be directly passed on to the residents in our communities using the services,” Harris said. “At its core, allowing these taxes would essentially allow local governments to impose a nearly direct tax increase on a community that did not vote for it. My legislation prohibits the twisted strategy and protects streaming services and their customers from baseless taxes.”

Harris noted fees are already imposed on internet providers through the Michigan Metropolitan Extension Telecommunications Rights-of-Way (METRO), meaning any new tax would essentially amount to local governments double dipping.

The legislation passed with broad, bipartisan support and now moves to the state Senate for further consideration.

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