Sales Tax Implications for Online Video and Video Game Streaming

As the digital industry of online video streaming (movies, television shows, online subscriptions), as well as online gaming platforms and streaming, continues to grow, many sales tax implications have followed.

How To Define Online Video and Video Game Streaming Services

Each state defines these services/subscriptions differently. For instance, Connecticut considers this computer and data processing services, while Florida tabs them as communication services. It is important to know how to define these services for their sales tax treatment purposes. One way to define these streaming services is based on how digital products are transferred to the end-user.

There are two ways digital products can be transferred to the end-user2.

  1. Digital products are online media that are transferred electronically to an end-user for use as a subscription or viewing on the internet. These items can include, video, gaming, music photos, etc.
  2. Digital products are online media that is downloaded to the consumer’s computer through purchase.

We will focus on electronically transferred digital products in this article. These products do not include software transferred to users.

Online Video and Video Game Streaming Services in Different States


California, CA

In general, California does not charge sales tax for digital products. The state has not enacted any statewide legislation regarding sales tax on streaming services. However, cities are allowed to impose a Utility Users Tax (UUT). UUT is a usage tax on communication, electric, and gas charges (Sec. 4.62.060 A Communication user tax). Included are Ancillary telecommunication services, “services that are associated with or incidental to the provision, use or enjoyment of telecommunications services.” It is a grey area when involving streaming services. These are evaluated on a city by city basis, whether or not a tax is imposed resides with the city. Bill AB252 stating that streaming services constitute an entertainment service, and should be a state affair and not subject to local utilities tax, was proposed but never passed.


Florida, FL

The Communications services tax (CST) covers tax for online video streaming in Florida. It is made up of 2 parts, the Florida communications services tax, and local communication services tax. The state rate is 7.44%, made up from the 5.07% CST rate, and a 2.37% gross receipts tax rate. The local rate varies by jurisdiction (Current local tax rates). Included in the Florida CST is video service is television programing or streaming from any communication service provider, mobile communications, and music streaming. Permanent downloads of video content are also not subject to Florida CST or sales tax.

New York

New York, NY

The sale of electronically delivered videos through the internet are not subject to NYS sales tax. This type of sale is considered an intangible. Under Tax Law 1105(a)(A) intangibles are not taxable. This includes videos that are downloaded from the internet. “The popular website Hulu is an example of a site that provides a large variety of streaming television programming.  Currently, the service is free to end-users and is supported by uninterruptable advertisements that air during the programs (Pg. 19).” This rule applies to any product that is transferred electronically to a customer through the internet.


Texas, Tx

Texas imposes sales and use tax charges on electronically delivered items sold to customers in Texas. Subscriptions that offer users instant streamed videos constitutes taxable products under ¶403-844. This would be in the category of taxable cable television service. “Tax Code Sec. 151.0033 defines a cable television service as “…the distribution of video programming with or without the use of wires to subscribing or paying customers.” Tax Code Sec. 321.203(j) states that “(t)he sale of services delivered through a cable system is consummated at the point of delivery to the consumer.” The law also refers to these services as Amusement services.


Connecticut, CT

Subscription charges for streaming services are taxable in Connecticut. They are categorized as Computer and data processing services. ¶401-761 states, “the subscription provides the customer with the right to access digital content, and sales of access to digital content are taxable as computer and data processing services.” Starting October 1, 2019, these digital services will no longer be considered computer and data processing services. They will be subject to the full 6.35% sales tax rate.

If you have any questions regarding the taxability of your online video and video game streaming services please contact us at


  1. “Assembly Bill No. 252”, California Legislative Information, February 28, 2017,
  2. “Florida Communications Services Tax”, Florida Department of Revenue,
  3. “Communications Services Tax Rate Table”, Florida Department of Revenue Address/Jurisdiction Database,
  4. “Report on the Taxation of Telecommunications Industry in New York State”, New York State Department of Taxation and Finance, October 2009,
  5. “Texas: Streamin Services are now Taxable as Amusement and Cable TV”, Davis Davis & Harmon LLC, May 2, 2018,
  6. “Tax Code, Title 2, Sube Title E, Chapter 151, Subchapter A”, Texas Constitution and Statues,
  7. “New Connecticut Tax Legislation”, Connecticut Council of Family Service Agencies, June 13, 2019,
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