Disney, Charter Leading Battle To Wipe-Out Taxes On Streaming

Two months after launching Disney+, the Walt Disney Co. is lobbying Florida lawmakers to slash taxes on video streaming services and other technologies — a move that could cost local governments nearly $200 million a year.

Emails obtained by the Orlando Sentinel show that a lobbyist representing Disney and Charter Communications Inc. — the parent company of cable provider Spectrum — has been working directly with the staff of House Speaker Jose Oliva, R-Miami Lakes, on a plan to rewrite the state’s communications services tax, which is charged on a variety of services, from landline telephones and cellphones to cable, satellite television and streaming video.

Two lobbyists involved with the legislation said Disney is leading the effort.

The proposal (HB 701, SB 1174) would make three significant changes. It would ensure the tax is charged on all streaming video services, forcing any providers who may not be collecting the tax to start doing so. It would make cities and counties, which currently set their own rates, levy a single, standardized rate. And it would cut the tax — but force local governments, rather than the state itself, to absorb almost all of the revenue hit.

The plan has been embraced by some lawmakers in Tallahassee eager to reduce what they sometimes call Florida’s “cellphone tax,” which averages 12.44% for most services.

“I want every Floridian who has a cellphone — or has Netflix, Comcast or Spectrum, any kind of communication service — I want every Floridian who has that in Florida to get a tax cut,” said Rep. Jason Fischer, R-Jacksonville, who is sponsoring the bill in the House.

But for Disney and other big streaming providers, analysts say the motive may not be to save consumers money but rather to create space for the companies to charge higher prices themselves.

The world’s biggest media and technology companies are locked in a potentially existential battle for streaming supremacy — and every dollar counts.

But consumers have finite budgets, and there is a limit to how much they will spend on streaming services. A survey commissioned last year by the Wall Street Journal found Americans are willing to spend an average of $44 a month on their combined streaming services. A survey by financial-consulting firm KPMG put the figure even lower: $33 a month. When it comes to paying for streaming services, KPMG found, there is “a high degree of price sensitivity.”

The combination of consumer price sensitivity and skyrocketing production budgets has made finding ways to squeeze other costs out of the system — like taxes — crucial for Disney and other big streaming providers.