Apple v Chicago streaming service tax battle ends in hushed settlement

A lawsuit settled last week between Apple and Chicago will be meaningful for streaming services around the US. At issue was the US city's "amusement tax," which levies a 9 percent fee on entertainment facilities. The law was expanded in 2015 to include streaming services such as Apple TV and Music, Netflix, Spotify, Hulu and …

[Oglethorpe]

Think of the poor bureaucrats

God forbid anyone in Chicago reach something resembling happiness without first throwing some change in the direction of city officials.

[John Brown (no body)]

Re: Think of the poor bureaucrats

The American Dream, including the "pursuit" of happiness. But if only if you can afford it.

[Swarthy]

Am I reading this right?

As I am reading this, it looks like TV/Cable companies have been paying a percentage for using public rights-of-way, which makes sense; internet providers also pay a percentage for use of public infrastructure, which tracks. As people "cut the cord" and discontinue paying for cable, the localities are "losing"(read making less) money, so they want the streaming services to pick up the slack.

This seems a lot like the debate a few years ago about streaming/social media companies "needing" to pay the ISPs for the bandwidth. I believe the end result was that (for example) Netflix pays their ISP, the consumer pays their ISP, and the ISPs work out peerage and costs allocation - which is how it's been done since ISPs were a thing.

If this is the case, it would seem that the ISPs are already paying for the RoW utilization, and this is a panicky and poorly thought out attempt to balance the municipalities' books.

[Yes Me]

Re: Am I reading this right?

ISPs carry bits, and pay for the right of way. Streamers sell entertainment, and that's taxed in Chicago. All makes complete sense, and there's no reason a streaming service should be exempt from paying taxes like any other business.

[Swarthy]

Re: Am I reading this right?

Right, the Chicago Entertainment Tax is a different beast than the other localities that were linked in the article. The Chicago one makes sense, and is hard to argue against (in a legal/logical sense, if not a pro/anti-tax sense); I was more wondering about the California suit and others that were linked in the article.

[M.V. Lipvig]

This is a HUGE surprise

Chicago's so far in the hole they hear Chinese below their feet. It was a given that a jidge from Chicago was going to rule in favor of the tax. That tax will help pay his pension in a few years. Apple needs to appeal to a court that's not based in Chicago because no court in Chicago is going to rule against a tax.

[John Brown (no body)]

Re: This is a HUGE surprise

It may be that a court outside of Chicago has no jurisdiction since it's a local Chicago city law. It would have to be appealed to a State or Federal court with a claim that Chicago has overreached and doesn't have the authority to impose this tax at all, or at least not in the case of streaming by being in breach of State or Federal law, but by the sounds of it, that's unlikely.

[Anonymous Coward]

Re: This is a HUGE surprise

Chicago's so far in the hole they hear Chinese below their feet.

Crabs actually. Or maybe the lost souls of MH370

[Anonymous Coward]

Great to know that you can haggle behind closed doors over your tax bill.

As my mate Karl used to say: "From each according to his ability to dissemble, prevaricate and haggle, to each according to the needs of his lifestyle"