Redondo Beach Could Tax Streaming Services Under $850K Ballot Proposal

REDONDO BEACH, CA — Streaming subscriptions could become more expensive for Redondo Beach residents under a proposed overhaul of the city's utility users tax that officials estimate could generate an additional $850,000 annually.

The Redondo Beach City Council is scheduled to consider the proposal Tuesday, Nov. 10, when members will decide whether to place an updated tax ordinance before voters in the March 2, 2027, municipal election. The measure would leave the city's existing 4.75% utility users tax rate unchanged but broaden its application to include video streaming services, potentially bringing internet-delivered entertainment under the same tax structure as traditional cable television.

Although the rate itself would not increase, subscribers could still face higher bills. A $20 monthly streaming subscription subject to the tax, for example, would cost an additional 95 cents per month, or $11.40 annually. According to the city's Nov. 10 agenda materials, utility tax auditor Gold Coast Partners estimates that extending the tax to streaming services could generate approximately $850,000 in additional annual general fund revenue.

Bringing Streaming Into The Tax System

Redondo Beach voters last approved a modernization of the city's utility users tax ordinance in March 2009, before streaming services became a dominant part of the television industry. City officials say the existing ordinance needs updating to reflect technological changes and ensure comparable video services are treated equally, regardless of how programming reaches subscribers.

The proposed changes would expand the definitions of video programming and video service suppliers to encompass internet-based delivery and other technologies, while preserving the existing tax rate. The proposal follows a legal battle between Disney-affiliated streaming companies and the city of Santa Barbara over whether an existing video users tax applied to streaming services.

In the case Disney Platform Distribution Inc. v. City of Santa Barbara, a California appellate court upheld Santa Barbara's application of its voter-approved tax ordinance to streaming services, rejecting challenges under federal law and the California Constitution. The court issued its original ruling in December 2025 and an opinion on rehearing in January 2026. Redondo Beach officials cite the decision as guidance for their proposed revisions.

Exemptions And Next Steps

The proposed overhaul would also broaden exemptions for qualifying low-income seniors and permanently disabled residents, including provisions allowing eligibility through certain needs-tested government benefits. Those revisions followed council discussions Oct. 13 and Nov. 3, when members directed staff to update the ordinance, reconsider exemption requirements and revise the proposed ballot language.

Another provision would remove an existing exemption for utilities, potentially bringing additional utility-related activity within the tax's reach. The additional revenue would support the city's general fund, which pays for services including police and fire emergency response, street and pothole repairs, park maintenance and other municipal operations.

If council members approve placing the measure on the ballot, voters would be asked to authorize the updated ordinance without increasing the current tax rate. The proposal would require a simple majority to pass. Under the proposed election timetable, written arguments for and against the measure would be due Nov. 24, followed by rebuttal arguments and the city attorney's impartial analysis on Dec. 4.

The council meets at 6 p.m. Tuesday in the City Council Chamber, 415 Diamond St. The proposal appears as Item M.2 on the meeting agenda.