Netflix Account Is ‘Corporeal,’ So Colorado Sales Tax Applies

Colorado can impose sales tax on the purchase of a Netflix Inc. subscription because the streaming video product is “corporeal” property, a state appeals court ruled Thursday in a decision reversing a win for the streaming giant.

“Our review of the contemporaneous understanding of ‘corporeal’ reveals that that term encompasses things that can be perceived by any of the senses—not exclusively the sense of touch,” Justice Matthew D. Grove wrote for the unanimous Colorado Court of Appeals.

The case sets a tone for how Colorado taxes digital products and services. The 1935 law governing the state sales and use tax ...