U.S. judge says cities can’t tax Netflix, YouTube, Apple, Peacock, Sling, etc. as cable TV companies

Recently, the city of East St. Louis tried to force companies like Netflix, Apple, and Dinsey to pay taxes as if they were cable TV companies. The city wanted to impose a 5% franchise fee on video streaming to city residents. Now, U.S. Judge Mark A. Beatty has ruled that streaming cannot be taxed in the same way as cable TV companies that install physical lines in cities.

The city was named after Netflix, Disney, Apple, Hulu, Amazon, WarnerMedia, YouTube, Peacock TV, DIRECTV, DISH Network, CuriosityStream, and CBS Interactive. If the city had won, it would have allowed the city to tax all streaming video services, including cable TV.

According to the judge, the streaming service in this case is not a cable TV company. In his ruling, the judge ruled that Internet service is not cable television. According to the judge, cable television is a closed-circuit system that provides television through cables, while the Internet is as open a circuit as possible. Although some cable TV companies also offer Internet service, that does not mean that the Internet is a cable TV system and may obviously be taxed under the laws for cable TV systems. there is.

In other words, the judge said East St. Louis cannot force streaming services like Netflix or YouTube. The judge found that unlike cable TV companies, Streaming does not take advantage of the city’s right to install cables that are not physically present in the city. Therefore, the city cannot tax them like cable TV companies that use the city’s right-of-way to install cable.

This is a huge benefit for streaming services in keeping costs down. This would allow the president to help fight other cities trying to do the same. For now, cable TV customers must continue to pay taxes that streaming services don’t have.