Gov. Janet Mills’ $15M Netflix, YouTube, Hulu tax approved by committee over GOP opposition

Governor Janet Mills poses for a photo with a group of Democrat legislators, including Sen. Ben Chipman (to Mills’ far left), the Senate Chair of the Legislature’s Taxation Committee.

AUGUSTA – Governor Janet Mills is planning on collecting more than $15 million in new revenue in her first term from a bill that proposes a new tax on streaming video services such as Netflix, YouTube, Hulu as well as music streaming services such as Spotify and Pandora. On Wednesday, the Maine Legislature’s Taxation Committee voted along party lines to approve the bill.

The bill, L.D. 2011, is sponsored by State Rep. Ryan Tipping (D – Orono) but was proposed by the Maine Department of Administrative and Financial Services under the authority of Governor Janet Mills. As Maine Examiner previously reported, Governor Mills is already counting on the new revenue from the bill as part of her recently introduced supplemental budget proposal, which plans to increase state spending by over $100 million more than the state budget that passed last year.

On March 4, the Taxation Committee voted along party lines to support the bill, with Democrats supporting the new tax, and Republicans opposing it.

Under the bill, virtually any seller of video or audio streaming services that makes sales to Maine consumers would be required to collect and remit the tax to the state of Maine.

According to testimony to the committee from Michael J. Allen, Associate Commissioner for Tax Policy at the Department of Administrative and Financial Services, the streaming tax would cost Mainers about $3.73 million in fiscal year 2021, $5.8 million in fiscal year 2022 and $6 million in fiscal year 2023. That amounts to a more than $15 million tax increase through the end of the current and following state budget.

The tax is tucked into a bill that also makes changes to several other parts of Maine’s tax code which are far more mundane.

The non-profit group Maine People Before Politics has been critical of Governor Mills’ approach on this bill. They say that when Mills introduced her new spending plan, she claimed that it contained “no tax increases” and “no gimmicks.”

By placing the streaming tax in a separate piece of legislation her administration proposed and then adding the revenue into her spending plan, MPBP says Mills is not only breaking her campaign promise of no tax increases, but also that she is using the exact sort of gimmick she said she was not using.

Before L.D. 2011 can become law, it will need to be approved by the full Maine House and Senate.

The Maine Legislature’s Taxation Committee is comprised of thirteen members:

Sen. Ben Chipman (D – PORTLAND) Senate Chair

Rep. Ryan Tipping (D – ORONO) House Chair

Sen. Heather Sanborn (D – PORTLAND)

Rep. Kristen Cloutier (D – PORTLAND)

Rep. Diane Denk (D – KENNEBUNK)

Rep. Ann Matlack (D – ST GEORGE)

Rep. Stephen Stanley (D – MEDWAY)

Rep. Maureen Terry (D – GORHAM)

Sen. Matthew Pouliot (R – KENNEBEC)

Rep. Amy Arata (R – NEW GLOUCESTER)

Rep. Bruce Bickford (R – AUBURN)

Rep. Ted Kryzak (R – ACTON)

Rep. Don Marean (I – HOLLIS)

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