Apple settles lawsuit against Chicago over city’s streaming services tax

Apple and Chicago have come to terms on a settlement deal to drop the company’s lawsuit challenging the city’s controversial tax on users of streaming services.

Winston Cho for The Hollywood Reporter:

In an order issued on Wednesday, Cook County Circuit Court Judge Daniel Duffy dismissed the case. Terms of the settlement weren’t disclosed.
Chicago introduced a so-called “Netflix tax” in 2015, levying a 9 percent surcharge on users of streaming entertainment services. The revenue program was a result of a reinterpretation of a long-standing tax program, extending the city’s tax on tickets for recreational activities and concerts to “amusements that are delivered electronically.”
Apple sued in 2018 alleging violations of the commerce and due process clauses of the Constitution as well as the federal Internet Tax Freedom Act, which prohibits jurisdictions from imposing discriminatory taxes on several types of electronic commerce. “Customers are subject to an illegal tax,” reads the complaint. “If Apple does not collect the tax from its customers, it will directly be liable for a tax that the City of Chicago has no power to impose or authority to enforce.”
The judge never addressed the merits of the case. In choosing not to further pursue its claims, Apple and other streamers impacted by the tax avoided a ruling that could’ve set a precedent that the revenue program is legal.

MacDailyNews Take: Yet another unconstitutional tax grab. What are Chicago citizens getting for their money?
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