Should Netflix, others pay Fort Worth taxes for the shows they stream to your screens?
The Fort Worth City Council will vote Tuesday on whether to hire an outside law firm to sue video streaming services Netflix, Disney+, and Hulu.
The suit is over nonpayment of “franchise fees,” which are usually charged to cable and television providers for use of city infrastructure.
Streaming services have avoided paying these fees in the past because they are not technically classified as utilities, but a proposed Fort Worth City Council resolution claims these services rely on infrastructure that crosses “public right of way” and therefore should be subject to these fees.
If successful, the city says it could add hundreds of thousands of dollars to the tax rolls annually. The companies would be required to pay a 5% tax on any money generated in a local market.
Fort Worth would join 14 other Texas cities suing Netflix and other video streaming services over not paying these franchise fees since 2007. The others are Dallas, Arlington, Grand Prairie, Allen, Amarillo, Sugar Land, Mesquite, Plano, Waco, Abilene, Carrollton, Frisco, Garland, and New Boston.
The council will vote on a resolution to hire the law firms Mckool Smith, P.C., Ashcroft Sutton Reyes LLC, and Korein Tillery, according to the proposed resolution. These are the same firms hired by the other Texas cities.
A federal judge threw out New Boston’s lawsuit in September 2021 saying Texas law gives authority to the state’s public utility commission to regulate these fees, not municipalities.
Representatives for Fort Worth, however, said in an email the city is confident it can win.
Representatives for Netflix and Disney did not respond to requests seeking comment Friday afternoon.
The council vote will take place during its regular meeting at 6 p.m. Tuesday at City Hall.
This story was originally published March 4, 2022 at 5:06 PM.
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