Is a 'Netflix Tax' coming to California cities?

To generate more revenue from people who veered away from cable with online streaming services, some California cities may attempt to start taxing subscribers of Netflix, Hulu and other services..

Pasadena city officials are dealing with the issue right now, discussing the option of trying to tax subscribers for Netflix, Hulu and other online streaming service, according to the LA Times.

This has raised some concerns from consumers, but an existing California utility law could make it a possibility for more California cities to do, including Sacramento. 

The California Revenue and Taxation Code section 7284.2 states that, "the board of supervisors of any county may levy a utility user tax on the consumption of electricity, gas, water, sewer, telephone, telegraph, and cable television services in the unincorporated area of the county."

Though numerous cities have been advised this could be an option with cities having their own interpretation of this law, for Robert Callahan, the Executive Director of the Internet Association of California, he doubts the opposition.

"The bottom line is that websites and apps are not utilities." said Callahan. "Our fundamental objections are to that."

The legality of this utility user tax law has a variety of layers, which is why it's unlikely to change anytime soon, but whether it does or doesn't, the conversation has started.

Pennsylvania has a state six-percent sales tax that's now added for subscription services, like Netflix and Hulu, so other places in the country are adopting this method.

In other Netflix related news, there have been claims the streaming service has cut its library by a large margin over the last four years, according to Cinemablend. In 2012, there were about 11,000 titles within the Netflix library and now the number is about half of that.

Copyright 2016 KXTV


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