From its beginnings as a mail-order subscription based business, Netflix has quickly turned into an online streaming giant. According to Forbes, the company earned $1.34 billion in revenue during the second quarter of 2014, and Netflix now garners 34.2 percent of all Internet bandwidth use during particularly popular hours of operation.

With this fast-paced growth comes one conflict legislators now face. How do you tax an online streaming company?

For a flurry of industries, taxes are inexorably tied to the physical assets of a business. Goods are taxed when they are delivered to certain ports and sales taxes are applied to the physical distribution of particular goods. But how do you apply the same tax to an inanimate that is provided from a locations often thousands of miles away? 

The Buenos Aires City Legislature has already established a tax that would charge foreign entertainment media providers a 3 percent gross income tax on sales and rentals, according to Bloomberg. The new levy was subsequently called the "Netflix Tax," but it applies to all foreign entertainment media providers that distribute their content via the Internet. The new measures officially go into effect Nov. 1.

Meanwhile, the Canadian legislature is grappling with large telecommunications companies that are calling for a similar Netflix tax, according to the Toronto Sun. During hearings with the Canadian Radio-television and Telecommunications Commission, companies such as Bell and Rogers have called for the Canadian government to issue a levy against streaming services that earn over $25 million in revenue per year. The local companies claim that the Netflix service, which does not follow Canadian content laws, put in-state companies at a disadvantage. However, Netflix officials told sources at The Hollywood Reporter that this tax may merely serve to benefit Canada's larger telecommunications companies and not Canadian consumers or producers.