Proposed legislation in California aims to prohibit video-streaming services, such as Netflix, Hulu and YouTube, from being taxed as utilities by local municipalities. The AB 252 bill, called the Streaming Tax Relief of Entertainment And Movies (STREAM) Act of 2017, was introduced by assembly member Sebastian Ridley-Thomas to “safeguard high tech innovation” in his state. This comes after the city of Pasadena had previously worked to introduce a nine percent Utility User Tax for streaming services, although those plans from 2008 didn’t pan out.
Still, according to Ridley-Thomas, at least 45 other California cities have been advised that they could roll out a similar tax policy if they want. “Video streaming companies like Netflix and Hulu are entertainment providers,” he said in a statement, “not local utilities akin to electricity, sewer, or even cable television.” A couple of years ago, Chicago implemented a “cloud tax” on a myriad of streaming services, including Netflix, Spotify and Xbox Live. Ridley-Thomas hopes his legislation will keep that from happening in California.
