A services to falter, or at least to be concerned. Perhaps that is why the city of Chicago introduced a new tax in 2015, the so-called “ Netflix tax .”
The idea was to impose a 9% tax on “electronic entertainment” , essentially targeting streaming services. The aim was to compensate for the loss of income from brick-and-mortar stores.
However, companies did not sit idly by. Apple filed its challenge in 2018, and was one of many groups and companies that opposed the law. The aforementioned firm has reached a settlement with Chicago over this “Netflix tax.” united arab emirates number data The terms of this agreement have not been made public. However, Bloomberg Tax reported last year that revenue from the tax — which is considered the first of its kind — rose to more than $30 million in the fiscal year that ended June 30, 2021.
Entertainment, the video game trade group Entertainment Software Association and an advocacy group representing Netflix, Hulu and Spotify.
The number of objections to the tax caused delays in Apple's lawsuit against the city. The case was put on hold for more than two years while the streaming service users' challenge made its way through the courts.
But over time, these other legal challenges were either resolved in Chicago's favor (and not overturned on appeal), or shaken or dropped. Last week, a judge dismissed Apple's amended lawsuit , which alleged that the tax is unconstitutional.
Although revenue from the Netflix tax is only a small fraction of the city’s roughly $1.5 billion in tax revenue, Bloomberg Tax notes that revenue from this channel has roughly tripled over the past five years.
The tax brought in $9.4 million in its first full year in 2017 , rising to $28.8 million in 2020 and $31.2 million in 2021, from the 47 businesses registered under those rules. By contrast, much of the city’s other local business taxes took a hit when the pandemic forced brick-and-mortar locations to close.