A Virginia Sales Tax on Digital Goods Like Netflix Could Be Coming to Hampton Roads Consumers

by | Mar 21, 2024 | News

Hampton Roads residents could soon be paying state sales tax on everything from Netflix and Hulu subscriptions to extra cloud storage and online software. The latest version of the proposed two-year state budget includes a digital sales tax that would apply Virginia’s sales tax rate to any digital goods purchased online.
 
That means a video game, smartphone app or music or streaming service purchased online would incur state sales tax. Depending on the location, a consumer living in Hampton Roads could face a sales tax of up to 7% on digital purchases: A $15.49 monthly Netflix subscription could now come with a tax of up to $1.08.

“In the past couple of decades, consumer spending habits have shifted, so this would ensure that sales tax applies equally to someone who buys a physical CD and someone who buys the digital version, for example,” Megan Davis, tax and budget policy analyst for The Commonwealth Institute for Fiscal Analysis, said in an email.

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