I'm struggling to understand why it's a bad thing that a municipality wants to levy taxes. How do you expect these places to pay for infrastructure and maintenance and public services?
The taxes are levied on "video service providers" in order for those providers to secure the right-of-way to lay cable. Essentially, it's a tax to pay for the providers using municipal infrastructure (streets, utility poles), burying it if necessary, etc - for the purposes of laying new cable.
Netflix and Hulu don't own or lay cable, they don't need right-of-way. As I understand it, the tax is already levied on cable providers and ISPs. I don't think it's good or bad, because Netflix/Hulu will just charge customers in those cities more (or refuse service).
It's a bit dumb to search for a legal technicality in the state law to raise taxes and avoid public scrutiny, if the cities need money from their residents they can raise property taxes (or cut services). But my guess is that is less politically expedient. However the tax payers now have to foot the bill for the lawsuit, so who really wins?
Looks straight forward. I’m unfamiliar with Ohio specifically but the article lays it out: they’re subject to the State’s sales tax.
This, Hulu and Netflix argue, is a mutually exclusive tax with the franchise fee that the municipality wants to levy, a tax specifically targeted at cable companies that actually lay cable and therefore the State would actually lose money if they were reclassified from their current business status under State law.
It makes sense, and this does look like a money-grab. It can pay for its infrastructure out of its share of sales tax revenue or whatever other sources of revenue they have, raise those, or levy a new tax that specifically targets the type of business Ohio apparently classifies Hulu and Netflix to be under their State’s laws: a “specified digital products”, whatever that means, but I’m betting they don’t want to because doing so would hit more than Netflix and Hulu and bring more big players into the political fight.
And I would agree that it is true that this is a money-grab in this particular case. However, as one who is happy pay municipal taxes most of the time, I don't think OP was stating that this is the case in general. But when one revenue source dries up, and an entity tries to make up the shortfall by dipping into the (arguably, which is what the case is about) unrelated pockets of Netflix customers, then yeah, a negative word or two might be in order.
They’re trying to double dip: they want to be able to use a municipal levy despite Netflix, etc already paying sales tax.
One of the defenses is that if the levy is correct, then they should not owe sales taxes, which they point out with reduce the states income. The goal of the municipality is to circumvent the state government by claiming a municipal tax is owed as well.
Be careful what you wish for, because if streaming video requires paying taxes there can be no free service streaming video. And that is without looking at the absurd costs of complying with a patchwork of municipal laws.
They should levy taxes on people living in the municipality, not a company thousands of miles away that is not using their resources in any way whatsoever.
They’re attempting to do just that. This tax would be paid by the consumer, just as state sales taxes are. However companies must keep track of the relevant taxes for each consumer, charge them appropriately, and remit that to the appropriate government. It gets complicated real fast.
Netflix and Hulu don't own or lay cable, they don't need right-of-way. As I understand it, the tax is already levied on cable providers and ISPs. I don't think it's good or bad, because Netflix/Hulu will just charge customers in those cities more (or refuse service).
It's a bit dumb to search for a legal technicality in the state law to raise taxes and avoid public scrutiny, if the cities need money from their residents they can raise property taxes (or cut services). But my guess is that is less politically expedient. However the tax payers now have to foot the bill for the lawsuit, so who really wins?