Netflix, Hulu Argue They Aren't 'Video Service Providers' Before Ohio Supreme Court

An anonymous reader shares a report: A federal class-action lawsuit involving Maple Heights and 2,000 other U.S. communities against Netflix and Hulu took a detour Wednesday through the Ohio Supreme Court, with Maple Heights officials asking state justices to define the streaming giants as "video service providers." If the Supreme Court agrees, the streaming services would be subject to the same video service provider fees paid by cable companies. Those fees in Ohio are 5% of the companies' gross revenues they earn in the city and go directly into city coffers. The streaming companies argued they are instead "specified digital products" under state law. Therefore, they pay state sales taxes, and Ohio would lose money if the court determines they owe the local franchise fees since they would be exempt from state sales tax under Ohio law. The Ohio Supreme Court will determine whether Netflix and Hulu are video service providers, among other legal questions, in the coming months. After the Ohio Supreme Court issues an opinion, the case in federal court in Cleveland can resume. That case involves around 2,000 cities, but U.S. District Judge James Gwin directed the Ohio Supreme Court to answer legal questions first.

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