PROVIDENCE — Rhode Island's latest proposal to increase revenue from the online world could hike the cost of the latest Taylor Swift hit or episode of popular horror television series "Stranger Things."

State tax officials are looking at expanding the state sales tax to cover digital products such as vender-hosted software, audio downloads, e-books and streaming services, according to a Department of Revenue request submitted to state budget officials.

If approved, the proposal would require Apple's iTunes, audio streaming site Spotify and video streaming service Netflix (which makes Stranger Things) to collect the state's 7-percent sales tax on all transactions, including rentals, purchases and subscriptions.

According to a summary from the state Office of Revenue Analysis, the sales tax proposal would generate an estimated additional $3.2 million of revenue in the 2018-2019 budget year and rising to $3.6 million in by 2023.

"More than half of states tax digital products," the Office of Revenue Analysis summary said. "Consumer spending on digital video downloads, rentals, and subscriptions represented 56.4 percent of United States home entertainment spending in 2016."

A proposal from then Gov. Lincoln Chafee's administration to broaden the state sales tax in 2011 was scaled back to exempt digital products.

The new proposal, which could be included in Raimondo's budget proposal for the year beginning July 1, 2018, comes after Rhode Island extended sales tax to e-commerce sales of physical items starting earlier this year. That change, which was made despite the objections of some technology companies, came after e-commerce giant Amazon agreed to begin collecting Rhode Island sales tax.

The Office of Revenue Analysis summary includes estimates of the size of the digital market in Rhode Island based on an extrapolation of national figures.

In 2016, the state estimates that Rhode Islanders spent $33.7 million on digital video, including $6.6 million on downloads, $6.8 million on digital rentals and $20.4 million on streaming.

Rhode Islanders spent $14.1 million on digital music and $10.4 million on e-books in 2016, the summary said.

Tax officials acknowledge that getting companies to comply with the change and collect all sales tax from digital products could be an issue.

The proposal estimates a 70 percent collection rate on digital video and music products and 98 percent for e-books.

— panderson@providencejournal.com

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On Twitter: @PatrickAnderso_