Submission + - Can New Chicago Taxes on Netflix, Apple, Spotify Withstand Legal Challenges? (247wallst.com)
Mr D from 63 writes: In a tax ruling issued in early June, the city of Chicago expanded its amusement tax to include amusements such as TV shows, movies, videos, music and online games, if they are delivered by electronic means to customers in the city. The ruling became effective July 1.
The initial tax rate is 9% on streaming content. Sales of movies and music and the rest is not taxable, and the tax must be paid whether a customer is paying a subscription charge, a per event fee or some other variation. Chicago expects to collect $12 million a year as a result of the new tax ruling.
Amusement Tax Ruling;
The amusement tax applies to charges paid for the privilege to witness, view or participate in an amusement. This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically. Thus:
a) charges paid for the privilege of watching electronically delivered television shows, movies or videos are subject to the amusement tax, if the shows, movies or videos are delivered to a patron (i.e., customer) in the City (see paragraph 13 below);
b) charges paid for the privilege of listening to electronically delivered music are subject to the amusement tax, if the music is delivered to a customer in the City;
c) and charges paid for the privilege of participating in games, on-line or otherwise, are subject to the amusement tax if the games are delivered to a customer in the City.
The initial tax rate is 9% on streaming content. Sales of movies and music and the rest is not taxable, and the tax must be paid whether a customer is paying a subscription charge, a per event fee or some other variation. Chicago expects to collect $12 million a year as a result of the new tax ruling.
Amusement Tax Ruling;
The amusement tax applies to charges paid for the privilege to witness, view or participate in an amusement. This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically. Thus:
a) charges paid for the privilege of watching electronically delivered television shows, movies or videos are subject to the amusement tax, if the shows, movies or videos are delivered to a patron (i.e., customer) in the City (see paragraph 13 below);
b) charges paid for the privilege of listening to electronically delivered music are subject to the amusement tax, if the music is delivered to a customer in the City;
c) and charges paid for the privilege of participating in games, on-line or otherwise, are subject to the amusement tax if the games are delivered to a customer in the City.
