Colorado Supreme Court to Hear Netflix Tax Case and Other Appeals

The state's high court will decide if Netflix subscriptions are subject to sales tax and review child welfare and criminal evidence cases.

Apr. 2, 2026 at 11:09pm

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A dynamic, abstract painting featuring fragmented, overlapping shapes and lines in bright, clashing colors that evoke a sense of motion and energy, representing the complex legal and technological issues at the heart of the Netflix tax case.The Colorado Supreme Court's decision on Netflix's tax liability could have far-reaching implications for the digital economy.Denver Today

The Colorado Supreme Court announced it will hear several high-profile appeals, including a case on whether Netflix subscriptions are subject to the state's sales tax. The court will also review cases related to child welfare appeals and the use of prior testimony from a deceased witness in a criminal trial.

Why it matters

These cases could have significant implications for how digital services are taxed, the rights of children's representatives in the child welfare system, and the use of hearsay evidence in criminal proceedings in Colorado.

The details

In the Netflix case, the company sued the Colorado Department of Revenue in 2023, arguing its streaming service should not be considered "tangible personal property" subject to the state's 1935 sales tax law. A district court initially sided with Netflix, but an appeals court ruled that Netflix's service enables the perception of media and is therefore "corporeal" and taxable. Netflix appealed to the state Supreme Court. The court also accepted cases questioning whether a minor's legal representative can pursue an appeal in child welfare cases if the government withdraws its allegations, and whether a judge properly allowed jurors to hear testimony from a deceased victim in a criminal trial.

  • In 2023, Netflix sued the Colorado Department of Revenue over sales tax liability.
  • In 2025, a three-judge appeals court panel ruled that Netflix subscriptions are subject to the state's sales tax.
  • On April 2, 2026, the Colorado Supreme Court announced it will hear the Netflix tax case and other appeals.

The players

Netflix, Inc.

An American entertainment company that provides streaming services.

Colorado Department of Revenue

The state agency responsible for administering and collecting taxes in Colorado.

Judge Sarah B. Wallace

A Denver District Court judge who initially sided with Netflix in the sales tax case.

Judge Matthew D. Grove

A Colorado Court of Appeals judge who wrote the opinion ruling that Netflix subscriptions are subject to sales tax.

Judge Katharine E. Lum

A Colorado Court of Appeals judge who dissented in a case about whether a child's legal representative can pursue an appeal after the government withdraws allegations.

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What they’re saying

“As the Court of Appeals observed, when the 1935 legislature used the phrase 'tangible personal property,' it 'obviously intended to tax such goods' as 'photographs, music, television shows, movies, newspapers, magazines, and educational content.'”

— Colorado Attorney General's Office

“It is one thing to interpret the 1935 Act to also cover similar physical objects that did not exist in 1935, such as CDs and DVDs. It is quite another to interpret the 1935 Act to cover transactions that involve no exchange of a physical object at all because they are an alternative to selling music, movies, and other content on records, CDs, and DVDs.”

— Netflix attorneys

What’s next

The Colorado Supreme Court will review the Netflix tax case and the other appeals it has accepted. Rulings in these cases could have far-reaching implications for how digital services are taxed, the rights of children's representatives in the child welfare system, and the use of hearsay evidence in criminal trials in the state.

The takeaway

These cases highlight the ongoing legal and policy debates around the taxation of digital services, the balance of power between the government and children's representatives in the child welfare system, and the admissibility of hearsay evidence in criminal proceedings. The Colorado Supreme Court's decisions could set important precedents that shape these issues for years to come.