Thought you were smart by cutting cable? Not so fast.
In a move sure to be emulated by other cities, Pasadena’s finance department decided Thursday to apply a 9.4 percent tax on “video services” like Netflix, HBO Go and Hulu. Subscribers to these popular streaming providers will see their bills on each service jump as of Jan. 1.
Pasadena isn’t the first city to do this and it won’t be the last. Benicia and Indio adopted similar rules last month, Pasadena Star News reports, while at least another 45 municipalities could be mulling similar taxes.
“As companies begin to provide services that look more and more like cable services, those fall under taxable services,” said Don Maynor, an attorney with a firm that colelcts taxes from numerous cities. “There will be a whole bunch more that will be adopting them in a couple of months.”
Among the possible culprits coming for your Stranger Things addiction: San Bernardino, Glendale, Santa Monica, Culver City and Pico Rivera.
Iit legal? Pasadena and other municipalities say yes. Even though voters have not specifically voted to increase taxes on these streaming services, proponents says the authority was inherent in previous votes on utility user taxes. But the Howard Jarvis Taxpayers Association and others aren’t buying it.
“We will be taking a very close look at this,” said the organization’s president Jon Coupal. “If we determine this is an extension of an existing tax, then under the Constitution, they need voter approval. They can put as much lipstick on this pig as they want, but the pig is still a tax increase.”
Councilman Tyron Hampton also called the decision “ridiculous” and said he hopes the council will do something about it.