State Bill of the Month — January 2024: Missouri HB 2057

HB 2057 – Introduced by State Rep. Ben Keathley (MO-101).

Many localities are trying to implement franchise fees onto streaming services. Franchise fees are fees for the public right-of-way, not for merely providing televised entertainment.  Streaming services – like Netflix and Hulu – do not dig up or impede public property, nor do they create costs for local governments.

Courts are already ruling against local governments who are trying to push streaming services into the same corner of cable companies for this fee. Litigating such cases are costly and cumbersome for these cities. And, these costs are paid for by taxpayers. Furthermore, adding an additional tax to consumer services will affect consumers and businesses.

It is for these reasons (and others) that the Taxpayers Protection Alliance (TPA) is proud to make HB 2057, a bill to protect consumers from a backdoor streaming tax, introduced by State Rep. Ben Keathley (MO-101), its State Bill of the Month for January 2024.

Background:

TPA’s State Bill of the Month for January 2024 is Missouri’s HB 2057, which would modify the definition of “video service” for provisions of law relating to video service providers to now include streaming content. This legislation would protect consumers from a backdoor tax that would increase the costs of streaming services. The bill was introduced by State Rep. Ben Keathley (MO-101). This legislation would effectively ban a streaming service tax, saving money for Show-Me State taxpayers.

The rise of streaming services has allowed American consumers to seek alternatives to traditional cable providers. According to Pricewaterhousecoopers (PwC), thinks just 49.9 million homes will get TV from cable or satellite by 2027. For comparison, 100 million homes had cable in 2016. PwC also expects streaming services to hit 16 percent growth by 2027.[1]

Missouri legislators are fighting to keep more money in the pockets of taxpayers. Taxes on entertainment services would burden consumers who are already seeing “more companies with streaming platforms…steadily raising prices, making it less affordable for fewer options.”[2] Increasing taxes on consumer entertainment services ultimately will lead to higher subscription prices for subscribers to Netflix, Hulu and others.

HB 2057 was voted do pass in Missouri’s House Committee on Utilities by a 13-1 vote.

HB 2057:

HB 2057 would update existing Missouri law. As is, “franchise fees” were established so municipalities could charge telecom companies for digging up public areas to lay cable lines. These fees are used to offset the costs created by obstructing public streets and sidewalks. It is an exchange between a cable provider being able to install needed equipment and the local government generating business and revenue.

This is why TPA is proud to make HB 2057, introduced by State Rep. Ben Keathley (MO-101), its Bill of the Month for January 2024.

[1] https://cordcuttersnews.com/cable-tv-revenues-expected-to-shrink-30-billion-by-2027-as-cord-cutting-grows/

[2] https://fortune.com/2024/01/04/customers-cut-expensive-streaming-subscriptions-netflix-hulu-prime/