 The Liberty Justice Center recently filed a suit against the city, alleging the
comptroller exceeded his authority by reinterpreting the city’s 9 percent
“amusement tax” to apply to streaming services such as Netflix, Amazon Prime,
Spotify, Hulu, and XBox Live.
RELATED: Chicago startups could be exempt from Netflix ‘cloud tax’
The complaint notes the city has never taxed those services and “the City
Council has never authorized the Finance Department to tax” them.
The Chicago Tribune reported the Chicago’s Law Department spokesman said the
city had “not yet seen the complaint,” but was “confident that the ruling is a
valid application of the existing Amusement Tax.”
RELATED: Rahm Emanuel’s Chicago among cities to get extra U.S. taxpayer funds
Chicago Mayor Rahm Emanuel’s office, which expects to make $12 million per year
from the tax for the city, did not return Watchdog.org’s request for comment.
As Watchdog.org previously reported in July, the “cloud tax” was only one half
of a tax increase worrying consumers and local startups.
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 RELATED: Rahm Emanuel looks for a last-minute tax hike in 911
cell fees
Local entrepreneurs also worried about a personal property
transaction lease tax that could affect operating costs. Emanuel’s
office said in July it would take “measures to provide relief to
small businesses so as not to put them at a competitive disadvantage
with their peers in other cities.”
City residents already pay the highest wireless tax rate in the
country, which hurts the city’s poor minorities. And according to a
2014 estimate from a wireless industry affiliated-nonprofit,
MyWireless.org, Illinois residents pay the fifth-highest combined
federal and state wireless tax rate in the nation at 21.63 percent.
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