Gov. Janet Mills (D) has again proposed implementing a tax on streaming service subscriptions in Maine that would raise the cost of most popular entertainment streaming by 5.5 percent.

Although lawmakers ultimately rejected the governor’s efforts to include a streaming service tax in the supplemental budget signed into law in 2024, Gov. Mills has again include such a provision in her latest proposed biennial budget.

If approved, Mainers would be required to pay a 5.5 percent tax on the cost of their streaming service subscriptions.

Among other updates to the portions of state law governing taxation of taxable services, Mills proposed including “digital audio-visual and digital audio services.”

Under the language put forward by Mills, “digital audio-visual and digital audio services” were defined as “the electronic transfer of digital audio-visual works and digital audio works to an end user with the right of less than permanent use granted by the seller, including when conditioned upon continued payment from the purchaser or a subscription.”

Although cable TV premiums and the sale of digital media are currently taxed under state law, subscription-based streaming services have thus far been exempted.

When Mills previously proposed implementing a tax on streaming services, the clause was removed by lawmakers before approving a final version of the supplemental budget.

The Appropriations and Financial Affairs (AFA) Committee unanimously agreed to not include the proposed tax in the final version of the supplemental budget. Both the Democrat and Republican Committee reports were reflective of this decision.

Sharon Huntley — Director of Communications for the Department of Administrative and Financial Services — told the Maine Wire in March of 2024 that this provision was included at the time to “streamline, simplify, and modernize provisions of the sales tax to better align it with the practice of other states across the country.”

Huntley went on to explain that “this is not a new proposal,” noting that former Gov. Paul LePage (R) “proposed to include digital streaming services under the sales tax in 2017” and Mills “offered a similar proposal in 2020.”

“The proposal would align the taxation of these various forms of consumption of essentially the same content, regardless of the method in which it is consumed, by applying the sales tax to the sale of digital audio-visual and digital audio services,” said Huntley.

After Mills released her supplemental budget, Republican lawmakers came out in opposition to the proposed streaming service tax.

Sen. Jim Libby (R-Cumberland) brought attention to the proposed tax at a press conference held in March of 2024.

“Guess who gets hit? My constituents,” Sen. Libby said. “My constituents are all getting hit with a download fee of anything they do that is subscription based.”

“In this digital age, everything is subscription based. Everything is downloaded,” Libby continued. “You got to think about — down the road — how much we’re going to collect here as a state in this new tax.”

The streaming service tax included in the proposed biennial budget released Friday is not the only new financial imposition that Mills recommends making.

Also included in the budget are new fees assessed against various health care providers, including hospitals, ambulances, and pharmacies.

The budget also suggests increasing various taxes and licensing fees, such as for tobacco, cannabis, and concealed carry permits.