Several cities consider 'Netflix tax' for subscribers

By Sean Dowling, Buzz60

Do you love shows such as, House of Cards, Orange is the New Black and Stranger Things? Do you love them enough to pay for them?

You might soon be required to pay even more than the monthly streaming service charge in order to enjoy these shows in what is literally referred to as an "amusement tax." But most folks have dubbed this the "Netflix-tax."

City officials in Pasadena and 45 other cities in California are considering whether to tax subscribers on Netflix, Hulu and other video streaming platforms using a municipal utility tax code already in place designed for taxing cable-TV users.

The reasoning is to make the money back that was lost when people became "cord cutters" and dropped their cable TV providers when switching solely to video streaming.

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The move would follow in the footsteps of taxes that have gone into effect in Pennsylvania and Chicago, which are behind the "amusement tax" on cloud services.

However, in July, a lawsuit challenging the Chicago tax moved forward, claiming it is unconstitutional.

Critics of Pasadena's proposed Netflix utility tax say the move counts as double taxation because the user is already paying local taxes for internet access for their computer and for phone-carrier access for their smartphones.

Pasadena officials say they're exploring all options about how the city can collect revenue.

Netflix alone has 47 million subscribers in the U.S. and if you're thinking, "didn't I just pay more for my Netflix account?" you'd be right. The standard plan went from $7.99 to $9.99 a month in May.