How can cities tax streaming services?

Episode 1339 (13:41)

Seth from Long Beach, CA

Seth is hearing that some cities want to tax streaming services. Leo says that is horrible. Pasadena is charging 9.4% on each streaming service starting in January. The argument is that cities are losing revenue due to cord cutting. 9.4% is a high percentage, and isn't it taxing citizens twice? They already tax the internet access, so why would people have to pay that tax twice because of streaming? It's also highly problematic from a net neutrality aspect. Will they pick and chose what services to tax? All bits should be treated equally. According to the Internet Tax Freedom Act, to do so may be a violation of federal law.