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Economy / Business

Why Disney And Charter Want To Cut Florida's 'Streaming Tax'

The Mandalorian
The Star Wars series The Mandalorian has become a breakout hit for the Disney Plus streaming service. THE WALT DISNEY COMPANY/LUCASFILM

Look at your phone or TV bill and you'll see something called the Communication Services Tax. The state collects it. So do many cities and counties. It also applies to streaming services, and that's why two of Florida's largest media companies-The Walt Disney Company and Charter Communications-are lobbying to change it. 

Orlando Sentinel reporter Jason Garcia writes the companies are asking state lawmakers to support a bill that would lower and cap the tax. The companies say lower taxes will save consumers money, but cities and counties are concerned about a loss of revenue. Garcia spoke about his reporting with WUSF’s Bradley George. 

Why the tax is so complicated: 

“This tax is a combination of both a state rate and then a local rate on top of that. Each city and county can set their own rate. There’s nearly 500 cities and counties across Florida. So, between them all you've got more than 100 unique tax rates around the state.” 

Why media companies, and Disney in particular, want changes to the tax:  

"They're going to be losing money on Disney Plus for the next five years. And the only way to get it to profitability, analysts who cover the company are sort of uniformly in agreement, they need to raise prices. So the issue becomes, if you lower this tax, will Disney raise prices more than it otherwise would? 

Why local governments are concerned about the proposed changes:  

"They generally agree that the tax is too complicated, needs to be simplified. But what they don't want it to take giant revenue hits, particularly since they ultimately don't control this tax. It's the legislature that's setting that tax.” 

Disney and Charter’s response to Jason’s reporting:  

“Neither Disney nor Charter would respond to requests for comments about this, which is not terribly unusual when you're writing about legislation that they are directly involved in. The industry has been  pushing to reduce and simplify the tax for a long time. That part is not new. This direct involvement of Disney is new. And the urgency behind doing something around this tax as the streaming battles become more central to the future of some of these entertainment giants has added a sort of new urgency to everything.”