Netflix and the city of Loveland are in the middle of a spat over sales taxes, and now the city wants the state of Colorado to determine what's fair game.

The online streaming service and DVD rental company filed a complaint in Eighth District Court against the city of Loveland and its finance director Brent Worthington after Loveland issued a sales tax assessment of more than $116,000.

Netflix said the city's tax bill to the company for more than $116,508.22 in unpaid taxes violated state and federal law. The assessment recorded $85,504.43 in sales taxes, $8,550.49 in penalties and $22,453.30 in interest for the period between Sept. 1, 2012, and Aug. 31, 2015.

On Thursday, the city filed a motion to dismiss Netflix's complaint. It has decided to rescind the tax assessment and return the company's deposit, but now is asking the state to make a determination on whether it can tax online streaming services in the future.

Read more at the Coloradoan: