The City of Chicago has imposed a pair of taxes that would impose a sales tax on pay-per-view entertainment delivered over the internet. The law seems aimed at streaming services such as Netflix and Spotify, but could apply other streams and downloads.
A new Chicago, IL tax was instituted in two rulings, one that taxes "electronically delivered amusements" and another covering "nonpossessory computer leases" and levies a 9% tax against , any theatrical, dramatic, musical or spectacular performance, promotional show, motion picture show, flower, poultry or animal show, animal act, circus, rodeo, athletic contest, sport, game or similar exhibition.
Chicago officials are taking an aggressive tax approach as they grapple with shortfalls in the city's budget and pension fund, with the new tax expected to help make up the shortfall.
According to The Verge, lawyers are already lining up to contest the new taxes, claiming the tax violates both the Federal Telecommunications Act and, in the case of the second ruling, 1998's Internet Tax Freedom Act, intended to prevent discrimination against services delivered over the internet.
"I could do that same activity of research using books or periodicals without being taxed. So it does seem like I'm being picked on because I chose to do it online," attorney Michael Wynne told The Verge. - via Celebrity Access