Illinois – Chicago Sued Over ‘Amusement Tax’ on Streaming Services Netflix, Spotify

Effective September 1, 2015 the city of Chicago is imposing a 9% tax on electronic downloads (Ruling #5). Residents didn’t vote on the imposition are suing the City.

“WASHINGTON –  A group of Chicago residents is suing the city for allegedly trying to sneak in a 9 percent tax on streaming services like Netflix, Spotify and Amazon Prime.

The non-profit Liberty Justice Center filed a lawsuit in Cook County Circuit Court on Wednesday claiming the city had no authority to impose the tax, approved in June, which is expected to result in bill hikes for thousands of Chicagoans.

The suit argues the city Finance Department’s decision is illegal, and the comptroller “exceeded his authority.” Specifically, the suit claims the tax was slipped in using a creative interpretation of an old municipal code. Instead of passing a new tax, the city extended Chicago’s existing “amusement tax” to include paid subscriptions for streamed digital music, TV shows and games.”

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