Netflix, Others Push States to Decide on Taxing Their Services

Netflix Inc., GoDaddy Inc. and Automatic Data Processing Inc. are among the companies asking an Arizona court to answer the potentially billion-dollar question of whether their online streaming, web-hosting, and software offerings are taxable.

The Arizona Department of Revenue says yes. But the mounting lawsuits follow a push by legislators to address a state tax code that’s murky on how purchases like software, music, and movies are treated online versus in person.

It’s a scenario playing out across the country as Congress appears unlikely to settle the question. Companies say some states leave them guessing what’s taxable, setting them ...