Gov. Laura Kelly seems determined to fix the revenue disaster left by previous administrations.
It’s likely what got her elected and we readily admit this won’t be an easy task.
Her recent proposed budget of $7.8 billion aims to send long-needed monies to higher education, infrastructure and other services.
To help make this possible, Kelly’s budget proposes putting sales taxes on streaming services and digital downloads of magazines or books. This tax is expected to raise $22 million.
There’s a lot to unpack with regard to the streaming tax, including how will it be implemented, which services qualify and which services do not and, finally, let’s not forget cell phone apps. Ultimately, this tax simply may have too many factors to account for.
Would fees apply to Missourians streaming Apple Music as they drive across I-70? What impact would this have on free services offered at public libraries?
We also feel the need to point out that those who subscribe to streaming services do not own the content they consume. It’s more like a pay-to-play library service.
Another possibility to consider is would those who have opted to cut the cord return to cable companies to avoid the extra fees? Likely not, but for younger generations, the tax might mean the difference between sponging off a parent's account or paying for a streaming service themselves.
Larry Campbell, Kelly’s budget director, has advocated for the tax claiming saying that Kansans who make digital purchases often avoid sales tax fees they’d pay if they made a physical purchase.
“Kansas sales tax policy is antiquated,” Campbell told Kansas Public Radio. “As more and more items are being purchased online, the least we can do is level the playing field for our existing Kansas businesses.”
Campbell has a point in that, yes, e-commerce is inescapable in 2020 for most people, but most of the streaming companies Kansans use daily aren’t based in the Sunflower State. Doesn’t that make this interstate commerce and thus a federal issue?
We think Topeka should probably defer to the folks in Washington on this issue. A streaming tax could be made, but it should be done at the federal level or at least let the feds set the standards.
Best of luck, Gov. Kelly, getting a budget passed. We hope you reconsider including a streaming tax until these important questions can be answered.