Some California cities are contemplating a tax on online video services like Netflix and Hulu. There’s a big debate over how such taxes should be implemented – and even whether they should be at all.
Revenues from cable TV taxes are declining, as more people cut the cord and stream shows online. So cities are hoping to follow that money. They might need approval from voters to start collecting, though. Or they might argue language already on the books says it’s okay.
“There are a number of cities that believe they have the authority to tax websites and apps as utilities,” says Callahan.
Robert Callahan lobbies in California on behalf of the Internet Association.
“We think that just defies logic for a number of reasons.”
He says such measures open a Pandora’s Box into taxing different kinds of online content … and suggests that might be hard to justify to voters, or in court. Cities aren’t eager to be a test case. A few, like Pasadena, floated the idea this fall. But for now, those plans are on pause – and the cities didn’t respond, or declined to speak on tape.
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