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This week, Americans for Tax Reform founder Grover Norquist sent a letter to the Utilities Committee, Missouri House of Representatives, in support of H.B. 2057, which would protect Missourians from paying higher taxes and unnecessary extra fees on streaming services. Some Missouri municipalities have considered imposing franchise fees on streaming services. Local franchise fees are applied to television (primarily cable) providers, who must pay cities and towns for their use of public rights-of-way. For example, if a cable provider needs to dig up a section of the road to install a network cable, the town can charge a franchise fee to operate in the area as compensation for the disruption.  

Streamers, however, use the internet to reach homes. This means they either use wireless, satellites, or existing cable connections to deliver content to homes and do not alter municipal infrastructure to reach customers. 

If H.B. 2057 becomes law, it will prevent municipalities from imposing unnecessary franchise fees on streaming services and would be a victory for Missourians. Increasing taxes and fees on streaming services will only result in the costs being passed on to consumers. 

Unfortunately, the city of Chicago has already imposed a 9% tax on streaming services under its “amusement tax,” which also applies to concerts and sporting events. The city expanded the definition of law in 2015 to include “amusements that are delivered electronically.” According to the Tax Policy Center, Other than Chicago, “thirty-three of the 45 states with a general sales tax and the District of Columbia include video streaming services in their sales tax base.” States like Kentucky and Florida have special conditions enforcing the fees. Kentucky classified Video Streaming Services as “multichannel video programming services” while Florida “stands out among the states by targeting streaming services in two ways: charging platforms both a 7% communications service tax and a general sales tax.” 

A copy of the letter can be found here or below: 

January 25, 2024  

Chair Bromley  

Vice Chair Keathley Utilities Committee  

State Capitol  

201 W. Capitol Ave Jefferson City, MO 65101  

Chair Bromley and Vice Chair Keathley:  

On behalf of the taxpayers and consumers of Missouri, I urge you to support H.B. 2057 to protect Missourians against tax increases and price hikes for video streaming.  

Municipal franchise fees are meant to reimburse local governments for costs associated with building on public rights-of-way. Historically, cable companies have paid these fees to compensate municipalities for temporarily digging up public streets and sidewalks to lay cable lines that physically connected to homes. They were never intended as a plenary tax power. 

Because video streaming services do not require additional physical infrastructure to reach homes, they do not create any new costs for municipalities. Their content is accessed over the internet through channels as diverse as satellite, wireless service, and existing cable lines. Imposing franchise fees in spite of this would be little more than new taxes on streaming services. The legislature should bear in mind that once levied, these fees will most likely be passed on to consumers, raising the price for Netflix in the Show Me State but not her neighbors. 

Moreover, there are a number of technical roadblocks that would make imposing a location-based tax on internet content impracticable, including the fact that these services can be accessed from multiple devices in multiple locations. How would the municipality determine where the taxable event actually occurred? 

H.B. 2057 would not inhibit how municipalities have always operated with regard to franchise fees, merely clarifying that they can only apply to providers who make physical improvements to public rights-of-way. 

To protect Missouri taxpayers and consumers, I urge the legislature to clarify that this law was never intended to create a catch-all tax for every service that a Missouri resident views over the internet. 


Grover Norquist 


Americans for Tax Reform