The Georgia Supreme Court let stand a ruling on Tuesday that Netflix, Dish Network and other streamers won’t be charged local taxes like cable TV companies. The Supreme Court denied a petition to review the state Court of Appeals’ March decision that cable law doesn’t apply to streaming services, Law360 reported.
This is a boon for streaming services as well as cord cutters. Avoiding cable taxes and fees will help keep streaming services cheaper. Amid rising inflation, streaming services have had to raise their prices. In turn, households trying to rein in spending have opted to cut back on streaming subscriptions.
The Georgia Supreme Court had no further comment beyond the order to deny the petition.
The legal battle’s origins date back to 2021 when Georgia county and government officials filed a class action lawsuit against Netflix, Hulu, Disney, DIRECTV and Dish Network demanding up to five percent of the streamers’ gross revenue in the district. In total, streamers could’ve owed municipalities over $5 million. Courts ruled in favor of the streaming companies, and again this year after state officials appealed the decision in 2022.
This isn’t the first time states have tried to tax streamers. In 2019, Illinois lawmakers proposed the “Entertainment Tax Fairness Act” which would levy a five percent statewide tax on satellite and video streaming services. The previous year, Chicago launched a nine precent tax on internet-based entertainment like video, music and gaming platforms.
The court cases are just a piece of a larger puzzle — cord cutting is ushering in the death of cable TV as we once knew it.
TV companies are working to keep their customers while contending with the lower prices offered by streaming services. The cable industry is increasingly replacing its TV series with YouTube TV, choosing to focus instead on broadband. In the first half of 2023, Comcast and Spectrum lost over 2.7 million TV subscribers, and live TV services like Hulu+Live TV and Fubo lost over 500,000 subscribers. Other providers, like Cable One, aren’t ready to throw in the towel and are slashing prices.
Cable companies are still hanging on, but today’s digital landscape will only continue to emphasize faster access to content, especially with the burgeoning 5G home internet market. We’ll likely see more court cases like Georgia’s in the future.
Dish Network declined to comment.
Netflix, Hulu, DIRECTV and Disney were not immediately available for comment.