Hulu and Netflix have fought against California City that was targeted by tax streaming platforms

Hulu and Netflix have fought against California City that was targeted by tax streaming platforms ...

This time in California, they have managed to achieve another milestone in an increasing effort by local governments to require streamers to pay taxes for public infrastructure.

A Los Angeles judge found that the city of Lancaster does not have the right to sue Netflix and Hulu for fees on these data. Even if they could, the judge found that the steamers don't use any public wires, cables, or facilities anyway.

Lancaster is one of the many cities and towns across the country that have filed lawsuit against Netflix and Hulu, according to them. These municipalities claim that streaming services must pay expenses, which accounted for roughly five percent of gross income from local video programming, which once been reserved for cable companies.

In judicial cases across the country, Streamers have dominated a majority.

Judge Yvette M. Palazuelos of L.A. Supreme Court found that municipalities are limited to suing franchise holders, which Netflix and Hulu are not.

There's "no language" in the statute that "autorises a local corporation to impose an action that requires a non-franchise holder to apply for a state franchise under [the Digital Infrastructure and Video Competition Act] or to comply with its requirements," according to Palazuelos in a motion supporting the defendants' displeasure without permission to modify.

The plaintiff's decision to deter nonfranchise competitors from paying fees is part of the California Public Utilities Commission. She claimed that the statute "clearly grants only the PUC and not local entities a right of action against non-franchise holding video service providers subject to DIVCA's requirements. In other words, only the PUC can, under a plain reading of the relevant statutory rules, engage in a lawsuit to contraint non-franchise

Even though state laws vary, the "Legislature has not expressed any desire that individual municipalities are the ones who should ensure compliance," according to a Nevada federal judge. "In recognition of the public policy reasons for uniformity, the State was defying sanctions, and therefore "local governments... do not have a private right of action."

Even if the local governments could sue, Palazuelos agreed that DIVCA does not apply to Netflix and Hulu because they don't own or operate infrastructure in any public rights-of-way.

Plaintiff might presumably imply that Disney Plus, Peacock, HBO Max, and Amazon Prime Video could 'use' the same public right-of-way, and local corporations would be permitted to collect a 5% franchise fee from each franchise holder. This would result in a financial loss for local businesses that the Legislature did not intend."

On Wednesday, the Ohio Supreme Court debated whether Netflix and Hulu are video service providers and should pay franchise costs under state law. Among the questions in that case, the Ohio Attorney General filed a friend-of-the-court brief in support of the streamers.

Netflix and Hulu have maintained that they don't own or operate any wires, cables, or facilities, and that they are not a traditional video service provider as defined by the state law because there is no scheduled programming, and that they make their content available on request.

Local governments argued that adopting the position would make anyone who streams content online a video service provider, thus subject to franchising fees.

In Missouri, there has been at least one negative judgment, the first jurisdiction in which a franchise fee lawsuit was brought. In that case, a judge rejected arguments that Netflix and Hulu were not really video service providers at the dismissal stage. She found that the streamers might be covered by the Missouri Video Services Providers Act.

Other instances have been filed in Texas, Nevada, Tennessee, Indiana, Georgia, and Arkansas, among others.

The proposal for a class action aims to represent California's cities and counties where Netflix and Hulu operate.

Netflix and Hulu did not respond to requests for information.

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