Internet users barely want to pay $8.99 per month to stream movies and television when illegal downloading is rampant, so an additional tax is testing their tolerance. That’s why a group of Chicago residents are suing the city over a “Netflix tax,” which is really just a fancy word for “amusement tax.”
The A.V. Club reports that several Chicagoans have filed a lawsuit against the Windy City, arguing that the amusement tax did not sanction a tax on video services streamed on the Internet which can be accessed from virtually anywhere—not just Chicago. According to the Daily Dot, Chicago's comptroller has extended a 9-percent tax on amusement activities such as sporting events to include streaming services like Netflix and Hulu.
In the lawsuit, the plaintiffs say that the tax “unlawfully discriminates against electronic commerce because it imposes a higher tax rate on theatrical, musical, and cultural performances that are delivered through an online streaming service than it imposes on those same performances if they are consumed in person." And here I thought things were cheaper on the Internet.
They also accuse the city of illegally implementing the tax through its Finance Department instead of submitting the policy change to a city council vote. "The Municipal Code," the lawsuit read, "does not authorize the Comptroller to impose new taxes that the City Council has not authorized through a city ordinance."
If this lawsuit catches on, other cities around the country will be facing the wrath of streaming users.
