Georgia lawmakers are pushing for a tax on video games, digital video, books, music, and streaming services like Netflix which could result in internet users in the region paying more for download and streaming services, The Atlanta Journal-Constitution reports.
Legislators and internet providers are hoping to introduce a 4% tax on internet services to subsidize construction of internet lines in economically depressed rural parts of the state. So far roughly 66% of Georgians oppose the idea of introducing taxes to internet, television and phone services in order to raise money for rural internet.
State Rep. Jay Powell, chairman of the House Rules Committee, argues that customers have avoided having to pay sales taxes on digital products, which has created an imbalance between old and new technologies. While a physical book is subject to sales taxes, for instance, an ebook remains tax free.
“We are all part of the same state, and we help each other,” said Powell. “If Atlanta benefits, then the rest of Georgia benefits. If the rural section of Georgia benefits, then Atlanta benefits. We’re all in it together.”
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About 638,000 households — 16 percent of the state — lack access to internet with speeds of at least 25 megabits per second, according to a University of Georgia study.
State Sen. Steve Gooch remains unconvinced that a digital services tax will do the job, stating that funding could come from an existing fund for landline telephone expansion.
“We should exhaust all options and review our existing tax framework for internet, telephone, broadband and satellite services before making any decisions,” said Gooch.
The digital services tax could generate around $48 million by 2021 and reach $310 million by 2024, according to state estimates. Revenue from the tax would be split between state and local governments, with the state’s half dedicated to the general treasury. As such, there isn’t a guarantee this would actually be used to increase internet access in rural Georgia. The state is not able to put funding toward a specific issue without changing its Constitution.