Why the tax man is going after Netflix and Burning Man

October 23, 2015, 3:42 PM UTC
Burning Man Festival in Nevada Desert
377801 09: People wearing illuminated costumes walk past the burning remains of a 52-foot tall wooden man September 2, 2000 during the15th annual Burning Man festival in the Black Rock Desert near Gerlach, Nevada. Despite high winds, dust storms, and a bit of rain, some 27,000 people camped out on a remote desert playa, or dry lake, for the week-long counter-cultural celebration of art and "radical self-expression." This year's theme was the body. (Photo by David McNew/Newsmakers)
Photograph by David McNew — Getty Images

Governments are always on the lookout for new revenue, but state and local governments in the U.S. are particularly hungry these days.

The rise in online shopping and the decline of purchases of traditional media, such as DVDs and CDs, has led to sluggish tax receipt growth in many jurisdictions, and now lawmakers are turning to new web-based services for relief. Bloomberg News compiled the latest attempts by states and localities to raise revenue from new services and found the taxman going after Netflix (NFLX), Airbnb, and even the experimental arts festival Burning Man.

According to the report: “In June, Chicago decided that its 9 percent ‘amusement tax’ should cover Netflix, Spotify, Hulu, Amazon Prime, and other streaming services, to help make up for sales tax revenue lost to falling DVD and CD sales.” Chicago is following the lead of foreign governments like Australia, which have instituted streaming taxes.

Airbnb is another target, as the service has drawn demand from hotels—a big source of revenue for state and local governments. Washington State, for instance, started collecting an Airbnb tax this month.

Even Burning Man isn’t free from the long reach of the taxman. This month, the state of Nevada changed its concession sales tax to an admission tax to capture more revenue from events like Burning Man and the Electric Daisy Carnival.

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