Chicago Becomes First City To Collect 'Netflix Tax'

Four years after announcing a 9% tax on streaming entertainment services, the city has collected $2 million in sales tax from Sony and two online ticketing services, making it the first major city to collect such a tax successfully. CBS News reports: The city collected $1.2 million from Sony in January, on services including PlayStation Video live events and purchases of music and video, according to Bloomberg. It also collected nearly $800,000 from Eventbrite and $70,000 from Fandango, the outlet said. The levy has been dubbed the 'Netflix tax' because it targets streaming video services in addition to gaming and other digital entertainment.

While Chicago seems to be the first city to successfully tax streaming services, it probably won't be the last. Rhode Island's governor proposed a budget this year that includes new sales taxes on digital videos, books and music. Pennsylvania enacted a similar tax in 2016 and is set to start enforcing it this summer. Chicago's expanded digital entertainment and services tax could raise up to $12 million per year, according to estimates issued at the time it passed in 2015. A lawsuit filed by a libertarian group on behalf of Netflix, Spotify and Amazon Prime customers is currently in the appeal stage.

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