Paying a tax on Netflix, Hulu and other video streaming services? Yep, it’s already in the works in some cities across the country.
Pasadena, California is the latest city to consider a more than 9.4% tax on services including Netflix.
In Chicago, Netflix users are suing the city over their 9% video streaming tax.
In Pennsylvania, the state charges 6% tax on everything from apps to downloads.
Cities across the country are desperate to make up for budget shortages and that could mean pouncing on your checkbook just for watching Netflix in the comfort of your home to make up the difference.
Cities want to reclassify video streaming services as a "utility" so they can tax it. But... How is that legal? One internet expert says it might not be. Robert Callahan, an Internet Association Director
elaborated, "Utilities are water and electricity and sewer and all sorts of other utilities. websites and apps don't fit that mold whatsoever."
Callahan says cities could be violating federal law because the government doesn't allow tax on the internet.
Yet, cities like Pasadena are using a loophole. Back in 2008, voters modernized a law allowing the government to tax cell phones, since hardly anyone still has a landline and now, that could backfire.
Voters never expected their local leaders to apply that to video streaming.
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