Sure, Illinois is home to some of America’s greatest hits: Lincoln, Bulls, Bears, Blackhawks, and deep-dish pizza. But Illinoisans pay a hefty price to be surrounded by all the awesome — especially folks who call Chicago home. Did you know that on top of normal taxes, Windy City residents must fork over a nine percent “amusement” tax for platforms like Netflix and Twitch!?
What is the Chicago Streaming Tax
Yes, it’s true. Chicagoans must pay an additional nine percent to stream movies and video games. It’s called the amusement tax, and it’s universally unpopular.
Previously, the fee only applied to in-person entertainment, like movies or sporting events. But in 2016, legislators deemed that the levy would also apply to “charges paid for the privilege to witness, view or participate in amusements that are delivered electronically.”
So who, exactly, pays the nine percent streaming amusement tax in Chicago? Any entity with a Chicago Zone Improvement Plan code — a.k.a. ZIP code — associated with their account.
Lost Legislative Battle against the Chicago Streaming Tax
Has anybody ever tried to get Chicago’s nine percent amusement tax rescinded?
In 2015, a group of taxpayers sued Chicago over the fee. The claimants maintained that the:
- Comptroller overstepped the office’s legislative reach;
- Law violated the Internet Tax Freedom Act, the Uniformity Clause of the Illinois Constitution, and the Commerce Clause of the U.S. Constitution; and
- Decree surpassed the city’s “home rule authority.”
Alas, the court sided with the government. The bench determined that the plaintiffs’ arguments didn’t cut muster. In its eyes, the Chicago online amusement tax was perfectly legal. And so the tax stands.
Contact a Chicago Tax Lawyer
The Gordon Law Group is a tax law firm with offices in Chicago and Northfield. Our team of experienced attorneys and accountants handles audits, fraud, criminal tax defense, late filings, and all tax positioning matters, including offshore issues.
We’ve spent a long time building and nurturing relationships that help our clients land in the best possible position. Get in touch today to begin the conversation. We look forward to chatting and building a plan that will solve your tax woes.