Chicago Starts Taxing For Netflix

Could it be? For years, internet companies including cable providers Comcast, Time Warner Cable, Cogent and others have complained how Netflix ‘free loads’ bandwidth across their networks. According …

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Chicago Is Taxing Services Like Netflix, What will be next?

Could it be? For years, internet companies including cable providers Comcast, Time Warner Cable, Cogent and others have complained how Netflix ‘free loads’ bandwidth across their networks. According to this ruling from the City of Chicago Department of Finance, tax fee is associated with any item known as ‘taxable amusement’.

What is taxable amusement?

According to this article:

  • “Any exhibition, performance, presentation or show for entertainment purposes, including, but not limited to, any theatrical, dramatic, musical or spectacular performance, promotional show, motion picture show, poultry or animal show, animal act, circus, rodeo, athletic contest, sport, game, or similar exhibition such as boxing, wrestling, skating, dancing, swimming, racing, or riding on animals or vehicles, baseball, basketball, softball, football, tennis, golf, hockey, track and field games, bowling or billiard or pool games;
  • Any entertainment or recreational activity offered for public participation or on a membership or other basis including, but not limited to, carnivals, amusement park rides and games, bowling, billiards and pool games, dancing, tennis, racquetball, swimming, weightlifting, bodybuilding or similar activities; or
  • Any paid television programming, whether transmitted by wire, cable, fiber optics, laser, microwave, radio, satellite or similar means.” [Emphasis added by the Department of Finance].”

In other words, any paid television programming becomes subject to the amusement tax. Is Chicago the first city to impose such a tax? Most recently, Jeffrey Schwab, an attorney with the non-profit Liberty Justice Center, said “he has filed suit on behalf of clients who subscribe to online streaming services like Netflix, Hulu and Amazon Prime after the city extending the 9% amusement tax.”

Quoted in an NPR article, college student Luis Montalvo states: “It might not seem like a big deal because it’s just Netflix, but what are we going to tax next?” he says. “I feel like that’s going to open the door to start taxing Facebook at some point, which sounds ridiculous to me.”

So what do you think? Is this a one off type tax, will it stay and more importantly, will this lead to other avenues to be taxed?

 

 

 

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