<b><i>Online Extra:</b></i><br> Legislation to Block a 'Netflix' Tax Is Shelved Amid Opposition

A Southern California assemblyman on Monday shelved legislation that would have blocked cities from taxing streaming video services such as Netflix and Hulu.

Assemblyman Sebastian Ridley-Thomas, D-Los Angeles, said he wants more time to work with the bill's critics, including the cable industry and local government agencies. By designating the bill AB 252 “for interim study” he could revive the legislation next year.

No city in California taxes streaming services. But many are studying the possibility, especially as consumers increasingly drop cable—a service that is subject to utility tax schemes—for untaxed online video streaming services such. Utility taxes generate about $2 billion annually for 157 cities and four counties, according to the California Local Government Finance Almanac.

Ridley-Thomas sought a five-year ban on taxing streaming video, arguing that the popular services should be allowed to thrive. The legislation pitted the tech industry against California cities as well as the California Cable & Telecommunications Association, whose members include Comcast and Charter Communications.

The bill “is not a solution unto itself,” Ridley-Thomas told the Assembly Revenue and Taxation Committee, which he chairs. “It's an attempt to foster a dialog.”

The Legislature should not be “picking winners and losers based on what the content delivery systems are,” Carolyn McIntyre, president of the California Cable & Telecommunications Association, said at Tuesday's hearing. “If you're going to have a [tax] policy make the policy technology neutral.”

Ridley-Thomas appeared to have the votes to move his bill out of the Revenue & Taxation Committee, but it faced another policy committee hearing—and steadfast opposition—before heading to the Assembly floor.

“If the bill moves today or not, we have to address this,” he said.

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Cheryl Miller writes for The Recorder, the San Francisco-based ALM sibling of Internet Law & Strategy.

A Southern California assemblyman on Monday shelved legislation that would have blocked cities from taxing streaming video services such as Netflix and Hulu.

Assemblyman Sebastian Ridley-Thomas, D-Los Angeles, said he wants more time to work with the bill's critics, including the cable industry and local government agencies. By designating the bill AB 252 “for interim study” he could revive the legislation next year.

No city in California taxes streaming services. But many are studying the possibility, especially as consumers increasingly drop cable—a service that is subject to utility tax schemes—for untaxed online video streaming services such. Utility taxes generate about $2 billion annually for 157 cities and four counties, according to the California Local Government Finance Almanac.

Ridley-Thomas sought a five-year ban on taxing streaming video, arguing that the popular services should be allowed to thrive. The legislation pitted the tech industry against California cities as well as the California Cable & Telecommunications Association, whose members include Comcast and Charter Communications.

The bill “is not a solution unto itself,” Ridley-Thomas told the Assembly Revenue and Taxation Committee, which he chairs. “It's an attempt to foster a dialog.”

The Legislature should not be “picking winners and losers based on what the content delivery systems are,” Carolyn McIntyre, president of the California Cable & Telecommunications Association, said at Tuesday's hearing. “If you're going to have a [tax] policy make the policy technology neutral.”

Ridley-Thomas appeared to have the votes to move his bill out of the Revenue & Taxation Committee, but it faced another policy committee hearing—and steadfast opposition—before heading to the Assembly floor.

“If the bill moves today or not, we have to address this,” he said.

*****
Cheryl Miller writes for The Recorder, the San Francisco-based ALM sibling of Internet Law & Strategy.