Pasadena, Other California Cities Mulling Over Possible ‘Netflix Tax’

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The Netflix company logo is seen at Netflix headquarters in Los Gatos on April 13, 2011. (Credit: Ryan Anson/AFP/Getty Images)

The intrigue of the Netflix drama “House of Cards” soon might pale next to the turmoil brewing over whether consumers should pay a tax to watch Netflix and other video streaming services.

Pasadena city officials are mulling whether to tax subscribers of Netflix, Hulu and other video streaming using an existing municipal utility tax code that initially was designed for taxing cable-television users. Sacramento and dozens of other California cities have similar codes that might enable them to consider the tax.

That follows similar so-called “Netflix taxes” that already have gone into effect in Pennsylvania and Chicago. More levies elsewhere could be coming as state and local agencies try to generate more revenue, especially to replace revenue lost from consumers who became “cord cutters” by dropping cable TV and switching to video streaming.

“The trend seems to be more toward taxation than non-taxation,” said Paul Verna, senior analyst at the research firm eMarketer.

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