Law 360: Chicago Overstepping With Streaming Tax, Users Tell Ill. Court

The city of Chicago’s amusement tax on streaming services like Netflix is an unconstitutional overreach of its authority, a state appellate panel heard Thursday in a first-of-its-kind test of a city's streaming tax.

This article first appeared on Law360 on September 19, 2019.

(September 19, 2019, 4:41 PM EDT) — The city of Chicago’s amusement tax on streaming services like Netflix is an unconstitutional overreach of its authority, a state appellate panel heard Thursday in a first-of-its-kind test of a city’s streaming tax.

Streaming customers argue that the city’s 9% tax on amusements delivered and enjoyed electronically is an unconstitutional extraterritorial use of its taxing authority because it is not based on use of the service within city limits.

“There’s no way to tell where somebody is using an amusement,” Jeffrey Schwab of the Liberty Justice Center, who represents the customers, argued to a three-judge panel.

 

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