“Don’t tax you, don’t tax me. Tax that fellow behind the tree.” — Russell B. Long
The city of Pasadena, California (home of the Rose Bowl and annual Rose Parade) voted to expand their telecommunications tax to include streaming video services such as Netflix. The tax rate is 9.4%; the tax will begin on January 1, 2017.
The Pasadena Star-News noted,
Councilman Tyron Hampton called the decision “ridiculous” on Friday and said he hopes the council will take up the topic.
“Cable has been a hardship for many families and now we’re going to add a hardship to them,” Hampton said. “Next we’ll be taxing you for streaming music on Pandora. This is ridiculous.”
There is absolutely no truth to the rumor that Pasadena will be bringing up a tax on Pandora at their next city council meeting. (Seriously, I made that up.) But it does show the desperation of California cities to balance their budgets. And the biggest culprit are pension costs.
The crisis dates back to the late 1990s, and the dot-com bubble. California tax revenues were increasing rapidly thanks to the stock market, so everyone drew straight lines going up, up, and up. California legislators and the then Governor Grey Davis forgot this song:
But I digress….
The Howard Jarvis Taxpayer Association isn’t enamored by the new tax, and I suspect a lawsuit is in the future. Still, there’s no doubt in my mind that Californians need to watch their wallets (which is nothing new, and one of the reasons I now reside in Nevada).
Tags: Netflix.Tax