Relating to entities that provide video services.

Contracts

• Municipal Franchise Agreements: Review definitions of "Gross Revenue." You must notify municipalities that your remittance calculations will decrease effective September 1, 2025, due to the statutory exclusion of streaming revenue.
• Content Partner Agreements: If you bundle third-party streaming services (e.g., Netflix, Peacock) into cable packages, ensure tax/fee responsibility clauses reflect that these are now non-assessable services in Texas.

Hiring/Training

• Billing & Finance Teams: Staff must be trained on the new revenue recognition rules. They must understand that "Internet protocol technology" services may still be taxable, while "streaming content" is not.
• Customer Service: Prepare scripts to explain to customers why certain fees have disappeared from their bills or why fees remain on traditional cable packages but not on app-based add-ons.

Reporting & Record-Keeping

• Revenue Segregation: You must implement strict accounting codes to separate revenue derived from "streaming content" from "video programming provided through wireline facilities."
• Bundle Allocation Methodologies: For bundled services (Broadband + Video + Streaming), you must document and retain the methodology used to allocate revenue to the non-taxable streaming portion. Municipalities will audit this allocation aggressively.
• Technical Delivery Logs: Maintain technical proof of delivery methods to substantiate that specific services are accessed via the public Internet (exempt) rather than a managed private network (potentially taxable).

Fees & Costs

• Franchise Fee Remittance: Expect a reduction in total franchise fees remitted to municipalities.
• Pass-Through Cessation: You must stop collecting the 5% franchise fee recovery from customers on streaming and satellite line items. Continued collection post-September 1, 2025, creates immediate class-action risk.