Missouri Governor Michael L. Parson signed into law S.B. 872 and H.B. 2057, exempting streaming and satellite TV companies from local franchise fees. This legislation follows legal actions by Missouri municipalities that sought over $50 million in fees from companies like Netflix and Hulu, arguing they owed these fees for using public rights-of-way.
These laws exclude video streaming services from local franchise taxes. S.B. 872 also includes tax exemptions for federal broadband expansion grants and electricity production. Under the new definitions put in place by H.B. 2057, video programming accessed via commercial mobile services or the internet, including streaming content, is not considered a taxable video service.
The legislation aims to address ongoing legal battles where Missouri municipalities, led by Creve Coeur, tried to apply traditional right-of-way franchise fees to streaming services. By enacting these laws, the state blocks such efforts. DirecTV has praised the move, stating it prevents outdated laws from hindering new technologies. However, the Missouri Municipal League has expressed concerns about the potential long-term impact on local infrastructure funding, as revenue from traditional cable services may decline.
For finance and accounting professionals, this development indicates a significant shift in tax policy in response to digital services. Understanding these changes is crucial, as they could affect local tax revenues and infrastructure funding. (S.B. 872 and H.B. 2057, August 28, 2024)