Apple Takes Legal Action Against Chicago's 'Illegal' Netflix Tax

Apple Takes Legal Action Against Chicago's 'Illegal' Netflix Tax

Can Apple manage to undo Chicago’s abhorrent ‘Amusement Tax’?

Several years ago, Chicago unveiled a harsh tax on its citizens.

Without consulting the public, city officials imposed a reinterpretation of Chicago’s existing amusement tax.  The city would now apply a 9% surcharge for the ‘privilege’ of using streaming internet services.

Dubbed by critics as the Netflix tax,’ a judge later upheld the city’s arbitrary tax, allowing Chicago to apply the surcharge “upon the patrons of every amusement within the city.”  Prior to July 1st, 2015, the Amusement Tax had applied only to paid television programming.

The arbitrary tax has gone mostly unopposed for the past few years.  Now, one company has filed a legal challenge.  And, it has the money to take the city to bat.

Redefining ‘amusement.’

In a complaint filed Monday at the Circuit Court of Cook County, Illinois, Apple made several strong complaints against the city of Chicago.

According to the multinational tech company, the city and its Comptroller, Erin Keane, have knowingly violated the US and Illinois constitutions.  With the ‘unprecedented’ imposition of the Amusement Tax, both parties have also violated the Internet Tax Freedom Act (ITFA).

The Amusement Tax, Apple argues, negatively impacts its customers.  Calling it “illegal and discriminatory,” the company declares it aims to protect Chicago consumers.

The IFTA, the company continues, doesn’t stipulate the creation or enforcement of Chicago’s amusement tax.