The Missouri Court of Appeals ruled in favor of DirecTV, Dish Network, and Sling TV in case number ED113308, City of Creve Coeur, Missouri v. DirecTV LLC et al, holding that the streaming providers do not owe back fees to municipalities for Video Service Provider Act (VSP) related fees. These fees were enacted in 2007 to replace cable-franchise agreements with a statewide system for “video service providers” who would be charged a VSP fee to use local access. In 2018, Creve Coeur sued the streaming providers, claiming the streaming providers did meet the definition of “video services” and as a result, that streaming providers owed back VSP fees to the municipality. While these proceedings were going on, Missouri passed legislation clarifying the original Video Service Provider Act did not apply to streaming services by adding the phrase “including streaming content” to the existing provision which stated programming delivered only through the internet was excluded from the fees. Creve Coeur argued this change altered the original act, and that its addition to the VSP Act means the steaming providers had obligations to pay the fees before the amendment’s passage.
In its findings, the Court of Appeals held that Creve Coeur was incorrect, the additional phrase only clarified and made explicit the intent of the original law, and no additional fees could be levied on streaming providers. The VSP Act was meant only to apply in situations dealing with dedicated provider- built facilities and does not apply to public rights and transmission over general internet infrastructure. The VSP Act fees can only be applied to the specifically named entities listed in the Act itself.
Taxpayers dealing in streaming services need to be aware of the specific laws in each region where they do business to ensure they are paying or exempt from all the correct taxes and fees based on their business model and descriptions. In this Missouri case, the Act governing fees specifically lays out which entities are subject to fees, but this is not always the case. Streaming providers and users will want to stay up to date to ensure they are correctly classifying sales in each region to collect and remit all proper fees and taxes. (Order Signed by Judge Virginia W. Lay, with Torbitzky, John P and Wright, Michael S. concurring, Case ED113308, in the Missouri Court of Appeals, Eastern District, City of Creve Coeur, Missouri v. DirecTV LLC et al.)