The Netflix tax was introduced in the city of Chicago back in 2015. The then mayor of Chicago, Rahm Emmanuel, introduced the Netflix tax to “close a gaping budget hole.” The tax was called an amusement tax and applied to services delivered electronically. You know, like Netflix, Prime Video, VUDU, and dozens of others.
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In 2015 I wrote: Many cities, Chicago included, are fighting to regain tax dollars lost to online services and amusements that would otherwise go into local activities. There are two sides to every argument, and it’s easy to see where the city is going with this new Netflix tax and why. But there are also valid arguments on the users’ side, and that’s where the courts will have to decide who’s opinion holds more weight. It will be interesting to see where this goes and how other cities react and tax online services and amusements.
It is now 2022, and there have been some developments in the story. Apple joined the battle in 2018 by filing a lawsuit against the city. According to the Business Standard, the tax placed a 9-cent levy on streaming services. Chicago collected more than $30 million in revenue from its Netflix tax on June 30, 2021. According to the Business Standard, Apple has settled with the city, but the terms were not disclosed.
“Apple and Chicago have come to terms on a deal to drop the tech giant’s lawsuit challenging the city’s first-of-its-kind tax on users of streaming services,” it added. The terms of the settlement weren’t disclosed.
The Business Standard
Other companies like Sony and groups representing Netflix and Hulu have brought legal challenges against the tax but courts have found no violations and have rejected the arguments.
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