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Netflix Tax looks to keep expanding throughout California


By Kyle O'Brien, Creative Works Editor

November 29, 2016 | 3 min read

A tax on streaming video seems to be the way many California cities are looking to replace lost revenue for those who have cut the cable and gone solely to streaming.

Credit: Netflix

Credit: Netflix

A dozen cities in the Bay Area are already considering tacking on the “Netflix Tax” to have streamers pay up to 10% extra to watch Netflix, Hulu, Amazon Prime and other internet-enabled channels. Voters in Alameda already approved a measure that rolls in streaming under the city’s utility tax.

In Southern California, Pasadena’s city finance department is set to implement a 9.4% tax on “video services,” which may take place on January 1, 2017. At least 45 other cities around the state may not be able to avoid a similar tax. Public officials in cities ranging from Santa Barbara to Sacramento have argued that tax rules need to be revised to account for changing technologies like streaming, according to a recent story in the New York Times.

But not everyone is happy about paying a new tax for something that isn’t a city utility.

“Websites and apps are not utilities and it defies logic to tax them like electricity, water or gas,” said Noah Theran, spokesman for the Internet Association, a trade group, in the Times article.

The argument against this taxation is that it may show no signs of stopping, considering streaming music, podcasts, video games and other technology is constantly being developed.

Paul Verna, an eMarketer analyst, said that a larger debate could erupt when people start seeing their bills if those smaller channels are continuously added.

In Pasadena, the proposed tax is under review, but a city council member who opposed the tax thinks the city should look for new revenue streams but the internet should be off limits on taxation.

So, watch your “Gilmore Girls” and “Unbreakable Kimmy Schmidt” now without extra taxes, because one may come your way soon.

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