Can it happen>
Before former Gov. Elliot Spitzer, the odds of getting Amazon and every online retailer to collect sales tax seemed dim. And now it’s taken for granted.
Governments love introducing all sorts of taxes and fees and fines on the thinnest of pretexts. So why not start charging every streaming service and then maybe every site.
Should Netflix and other streaming services have to pay local governments the same fees levied on cable operators?
That was the question before the Ohio Supreme Court during a Wednesday hearing, as the court debates whether streaming services such as Netflix and Hulu are covered by a state law that would require them to pay to play.
I have zero sympathy for Netflix and Disney (Hulu), but this is a senseless slippery slope argument that could have every site be taxed locally.
At issue in Ohio is the state’s 2007 Video Service Authorization law, which directed the state Commerce Department to determine what entities must obtain permission to physically install cables and wires in a public right-of-way. Companies deemed video service providers must pay a fee to local governments under that law.
Officials with Maple Heights in suburban Cleveland contend that streaming services are subject to the fee because their content is delivered via the internet over cables and wires.
So is all content. It would make sense to tax the internet service provider. Once you’re taxing the sites, you can tax any and every site.
Attorneys for Maple Heights argue that nothing in the 2007 law requires a video service provider to own or physically access wireline facilities in public rights-of-way to be subject to video service provider fees.
Without that equipment, streaming services “could not deliver their video programming to their subscribers,” Justin Hawal, an attorney representing Maple Heights, said in a December court filing.
The “modest 5% video service fee” is not burdensome but instead represents a small return on billions of dollars in benefits that the streaming services receive nationwide from network infrastructure, Hawal said.
If local governments can get hold of a “modest 5%” of video streamer service subscription fees, then maybe 5% of online sales and subscriptions to anything.
Shouldn’t they also be entitled to 5% of anything that travels across their cables?
And then the only thing left is to get sat internet, but that too might travel across their air.