New Yorkers Brace For Higher Netflix And Hulu Streaming Fees As MTA Desperately Seeks Funding To Avert Fare Hike

On Thursday, Democratic New York State Assembly members submitted a budget proposal to implement a 4% sales tax on popular video and audio streaming services, including Netflix, Hulu, Disney+, HBO Max, and Spotify.

According to the Wall Street Journal, this proposal is just one of several money-making schemes introduced in Albany. The others include a fee for package deliveries and a surcharge on ride-hailing rides. The Metropolitan Transportation Authority has stated that it needs an influx of $1 billion to keep subways, buses, and commuter trains running without resorting to a planned 5.5% fare hike that would increase the price of a single ride from the current $2.75 to $3.

March 25, 2023

The Democrats’ proposal to tax streaming services is an alternative to Governor Kathy Hochul’s controversial plan to increase payroll taxes to raise $700 million to bail out the cash-strapped MTA. The most significant public transit authority in the US has been struggling with sagging bus and subway ridership since the COVID pandemic, which has caused its revenue to drop.

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Lawmakers representing cities and towns outside of New York City are against Hochul’s proposed plan and are expected to reject it. Instead, they weigh various alternative measures, including raising corporate taxes to 9.25% on businesses reporting more than $5 million of income. The tax hike would generate $865 million in the first year, most of which would go to fund the MTA.

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The proposed sales tax on streaming services and the 25-cent surcharge on package deliveries are expected to raise more than $1 million and $300 million a year, respectively, according to lawmakers’ estimates. A separate proposal would see a 50-cent fee tacked onto ride-share trips within New York City, which could raise $240 million. A representative of Uber warned that if approved, the new surcharge would be passed on to customers.

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MTA officials have stated they do not care where the money would come from. Still, they generally favor Hochul’s payroll tax proposal because it is more stable and less unpredictable than corporate profits.

Lawmakers and Hochul must decide before the current state budget expires on March 31. As it stands, New Yorkers may face increased costs for their streaming subscriptions and other services to help the struggling MTA stay afloat.