Assemblymember Sebastian Ridley-Thomas Introduces Legislation to Safeguard High Tech Innovation in California

Friday, February 3, 2017

SACRAMENTO, Calif. – Assemblymember Sebastian Ridley-Thomas announced legislation to temporarily prohibit cities and counties from extending a utility use tax on video streaming services like Netflix, Hulu and YouTube.  AB 252, the Streaming Tax Relief of Entertainment And Movies (STREAM) Act of 2017, takes an important step in safeguarding California's position as the undisputed leader in high tech innovation. 

"Video streaming companies like Netflix and Hulu are entertainment providers, not local utilities akin to electricity, sewer, or even cable television," said Ridley-Thomas.  "Taxes should not be applied to their services without careful consideration.  Streaming video companies should be given an opportunity to work collaboratively with local governments, tax administrators and the public to structure appropriate tax and regulatory regimes reflective of the unique and innovative services they provide."

Last year, it was concluded that all video programing should be treated the same "regardless of technology or service provider,"  which opened the door for streaming video services to become subject to a utility user tax approved by Pasadena voters in 2008.  According to news, at least 45 additional cities have been advised that their local utility user taxes could be extended to video downloads.  These cities include San Bernardino, Glendale, Santa Monica, Culver City, Pasadena and Pico Rivera, which reportedly have built rates ranging from 4.5 to 11 percent. 

Assemblymember Ridley-Thomas released the following statement:

"The Internet has given rise to new technologies and services that were beyond our imagination just a generation ago.  Many of these technologies were developed and nurtured right here in California – a state that prides itself as being on the cutting edge of the innovation economy.  California must ensure that its tax and regulatory environment spurs, rather than impedes, continued growth in this vital sector of the economy.  The STREAM Act takes an important step in this direction by adjusting state and local tax regulation and allowing streaming service to continue to be untaxed until stakeholders develop an alternative."

About the 54th Assembly District

California's 54th Assembly District encompasses the City of Culver City and unincorporated Ladera Heights, and the Los Angeles communities of Mar Vista, Palms, Westwood, Cheviot Hills, Beverlywood, Faircrest Heights, Century City, Holmby Hills, Mid City, Lafayette Square, Baldwin Hills, View Park, Windsor Hills, Jefferson Park, Leimert Park Wellington Square, Hyde Park, West Adams, Jefferson Park, Portions of the City in Inglewood, Crenshaw Manor, Baldwin Vista, Village Green, Country Club Park, Arlington Heights, Baldwin Village and Olympic Park.