Arkansas: U.S. District Court Finds Netflix, Hulu Not Liable for Municipal Video Service Franchise Fee



Oct. 6, 2021, 5:00 AM

The U.S. District Court for the Western District of Arkansas Sept. 30 found Netflix and Hulu didn’t owe utility franchise fees to the City of Ashdown for sales and use tax purposes. The city filed a suit, asserting Netflix and Hulu failed to pay the franchise fee of 5 percent of gross revenues in each municipality where services are offered to various Arkansas municipalities in violation of the Arkansas Video Service Act. The district court noted: 1) Netflix and Hulu’s video programming fell within the Act’s public internet exclusion because the services were offered only to paying subscribers; 2) Netflix …