Assembly Democrats in New York are proposing a new tax on video and audio streaming services, such as Netflix and Hulu, to help fund the financially struggling Metropolitan Transportation Authority (MTA).

The proposal calls for a 4% state tax and a 4% local sales tax on any “digital product” that is delivered, streamed, or accessed electronically.

Cable and satellite TV, as well as newspapers, would be exempt from the proposed tax. The Democrats’ goal is to raise money for the MTA and prevent the planned 5.5% fare increase for 2023, as well as any future hikes.

Assembly Democrats in Albany have proposed a new plan to help the Metropolitan Transportation Authority (MTA) avoid fare hikes for subway riders by imposing a 4% state tax and a 4% local sales tax on video and audio streaming services, such as Netflix and Hulu.

The proposed levy would apply to digital products that are electronically or digitally delivered, streamed or accessed, and would generate approximately $29 million in the first year and an estimated $46 million by 2027 for public transit statewide, according to Democratic calculations.

Cable and satellite television as well as newspapers would be excluded from the proposed tax. The MTA has been struggling to maintain subways and buses after the COVID-19 pandemic decimated ridership and farebox revenue.

Governor Hochul and Senate Democrats have proposed their own plans to raise transit funds, and legislative leaders and the governor are currently negotiating a state spending plan ahead of New York’s March 31 budget deadline.

Republicans have criticized the various plans to raise transit funds, accusing Democrats of burdening New Yorkers with more taxes.

“At a time when many families are struggling to pay their bills and keep up with inflation, the last thing government should be doing is making it more expensive to enjoy a night in,” said Sen. Jake Ashby (R-Rensselaer). “I’ll be fighting this tax on streaming services like Netflix and Hulu, and I urge the governor to join me.”