Alabama Department of Revenue Proposes New Web Tax
Alabama Department of Revenue is considering a new rule requiring companies that offer digital streaming services such as movies, television programs and music to pay a 4-percent state tax. The revenue department says it's an attempt to update tax code for the digital era. Opponents say the rule overreaches the bounds of current tax law and should be decided by the Alabama Legislature. Companies could pass the tax onto consumers. Deputy Revenue Commissioner Joe Garrett says customers used to pay the same tax for tangible rental movies. He says tax-free online viewing could cost the state between $5 million and $10 million annually. The proposed rule could go into effect on October 1.