Chicago Becomes First City To Collect 'Netflix Tax' (cbsnews.com) 153
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.
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.
And next is... (Score:5, Insightful)
Re: (Score:1)
"It is a fact that customers bare most of the tax burden "
I guess if the taxes are high enough you can't afford clothes anymore?
Re: (Score:1)
This...
Being in the middle class I find that action is taken or talked about on my issues far more than my brother who is low income. Tax the rich, exploit the poor and campaign to the middle class.
Re:And next is... (Score:5, Informative)
Poor people are too busy working two jobs ...
Households in the bottom quintile of household income have, on average, 0.43 people in employment.
Households in the top quintile have an average of 2.1 people working full time.
Income inequality by household demographics [aei.org]
Re: (Score:2)
The scary question is which .1 of a person is on the job?
Re: (Score:2)
So you're supposed to raise the placenta also?
Re: (Score:2)
Re: And next is... (Score:2)
Re: (Score:1)
Agreed. It makes no sense that a Democrat stronghold like Chicago keeps passing new regressive taxes.
Someone needs to educate the voters in Chicago on the difference in progressive [wikipedia.org] vs. regressive [wikipedia.org] taxes.
Re: And next is... (Score:2)
Re:And next is... (Score:5, Insightful)
It makes no sense that a Democrat stronghold like Chicago keeps passing new regressive taxes.
If it makes so little sense, then why is it so trivial to predict?
Yes it goes against what the Democrats say that they stand for. So did Obama-care. So did the 5 new wars Obama got us into. So did the Clinton crime bill. Twice is recent memory the fought against tax cuts for the middle class.
At some point why dont you just admit that the whole party has full blown Stockholm syndrome.
Re: (Score:1)
Why was Obamacare not what the Democrats stand for? It seems like one of the most Democrat things Obama did.
Re: (Score:2)
Re: (Score:2)
Wasn't the whole point of it being a compromise with ideas from a Republican system that it might actually be deliverable and stand the test of time?
As in the art of the possible.
Re: (Score:2)
Yes it goes against what the Democrats say that they stand for. So did Obama-care.
psssst Romneycare
Democrats wanted single-payer, and tried to float the idea early in the Clinton presidency, through Hillary. She proposed the idea and wasn't permitted to say basically anything in public again until she took a big fat wad of Big Pharma cash (contributions, that is) and subsequently came out in public with the statement that single payer would never happen in the USA. That's the point at which she lost my support, well in advance of her presidential bid, and before her husband had even been
Re: (Score:2)
Zero.
None.
The Democrats had all the votes needed to pass ANY healthcare bill.
This dishonest disingenuous claim that its the Republicans fault is a fucking lie. Why are you spreading a fucking lie? What the fuck is wrong with you?
Re: (Score:1)
More taxes.
Nobody likes to be taxed, but unless you are an anarchist, you should accept that something has to be taxed, and this tax is no dumber than many other taxes.
Easy ones like this that hurt the poor the most.
Taxes on productivity and opportunity hurt the poor the most. Payroll taxes specifically target the working class, incentivize idleness and dependency, and take over $1.2 TRILLION per year from wages. A Netflix consumption tax makes far more sense than that.
Re: (Score:2, Insightful)
Re: (Score:2)
(There are also regressive taxes - where they poor pay more - but they're fairly rare.
Wrong. FICA and Medicare taxes are regressive. They are capped by income, so the rich pay far less than their proportionate share. For most Americans, these are the biggest taxes they pay, so they are not rare at all.
The benefits from SS and Medicare are also skewed against the poor. They are based on longevity, and the poor have significantly shorter lifespans. A poor black man has a life expectancy of 71. A rich white woman has a life expectancy of 83. So if both retire at 65, the poor guy collects
Re: (Score:2)
Why would the poor want to live longer? The rich would want to, cuz, well they're rich. Not poor and miserable.
There is near zero correlation between wealth and happiness.
Re: (Score:2)
There is near zero correlation between wealth and happiness.
Are you talking about income or wealth? The person you are responding to was probably talking about both. As Daniel Kahneman found (and explains in interviews), happiness tracks income pretty well, up to about $70,000. And beyond that, life satisfaction continues to track income without limit. So the really rich types are usually more satisfied with their lives than the wealthy, who are more satisfied than the middle class.
Re: (Score:2)
(There are also regressive taxes - where they poor pay more - but they're fairly rare.
Wrong. FICA and Medicare taxes are regressive. They are capped by income, so the rich pay far less than their proportionate share. For most Americans, these are the biggest taxes they pay, so they are not rare at all.
The benefits from SS and Medicare are also skewed against the poor. They are based on longevity, and the poor have significantly shorter lifespans. A poor black man has a life expectancy of 71. A rich white woman has a life expectancy of 83. So if both retire at 65, the poor guy collects benefits for 6 years, The rich woman for 18, three times longer.
The benefits are capped too. Do you have a better system in mind?
Re: (Score:2)
Those whose asset are MOST protected by Society, should pay the MOST. Afterall protect the asset of the poor often nothing, how much does that cost. Where as protecting asset in the billions how much does that cost and they are most definately far more protected than the meagre assets of the poor. In fact the cost of maintaining the society are exactly what pays for the opportunities to generate wealth. USER PAYS and clearly the wealthy have available them of the assets of a society far beyond any other and
Re: And next is... (Score:1)
multiple taxing jurisdictions? (Score:2)
Re: (Score:2)
I wonder if there is a way to get reimbursed on those.
Re: And next is... (Score:3)
Most poor people I know are sharing someone else's Netflix account. If you can't afford $1 per month in taxes, Netflix is likely pretty low on your list of priorities.
Re: (Score:2)
I keep saying that we need to treat the government as though it has an addiction problem. Except the drug is tax dollars.
Re: (Score:2)
That, and the fact that in most countries you're taxed but you get, you know, free healthcare and even college education.
In the US you get... I'm not quite sure what you get for your taxes.
I was in the US embassy in Buenos Aires. The reception hall was just... sad. Sad as in light fixtures missing and flourescent lights flashing. Wow. (And btw that's not paid by your taxes. It's paid by my USD 160 I had to pay to be there).
Re: (Score:2)
More taxes. Easy ones like this that hurt the poor the most.
Except you don't need Netflix. Go to the library or watch OTA TV if you're broke, or just pirate your damn entertainment.
Re: (Score:2)
Re: (Score:2)
This comment is downvoted, but pretty accurate. They expect you to walk I guess. Time is considered a person's most valuable resource when they're rich.
Re: (Score:2)
You know what else hurts the poor? No money for education, no basic social support, no government provided healthcare. If taxes hurt the poor the most, why are Europe's poor so much better off than America's low tax poor?
Re: (Score:2)
Re: (Score:2)
The Province of Quebec
A province isnt a city.
Re: (Score:2)
The Province of Quebec has been taxing nearly every online services out there since January 1st of this year. Be it Amazon, Steam or Netflix, it's getting taxed with 15%
Next time try reading the artcle, the literal first line:
"Four years ago, Chicago imposed a 9% tax on streaming entertainment services, leading to a flurry of lawsuits."
work-around ? (Score:4, Interesting)
Re: (Score:2)
If the billing address is in a jurisdiction that has the tax, you must pay the tax
But that's exactly the point that the parent was making. Just arrange for the billing address to be outside the tax zone. (PO Box, or a relative or something.)
Re: (Score:2)
States have a lot less power to throw you in jail for not paying taxes than the Fed.
Re: (Score:2)
Because Hollywood is in CA.
age old story (Score:5, Interesting)
"Whatever it is, sir, I have no doubt you will find a way to tax it."
Move (Score:2, Insightful)
Clean streets. Low crime. Nice people. Nice weather. Jobs. Great education.
No new big gov streaming entertainment services tax.
Lots of the USA is great to live in.
Support any city that lets you keep more of your own money.
Clear about one thing (Score:1)
Let's be clear about one thing: this isn't a tax on streaming services. It's a tax on consumers.
I never met a politician who didn't think some problem somewhere couldn't be solved by taxing something somewhere else.
Justification? (Score:5, Insightful)
Normally these taxes have some justification; there's some work necessary on the part of th city personnel which could, through a hazy light, justify the taxes.
I can't figure out what the justification here is. Seems the city has no obligations of any kind; no responsibilities. So what is the money being levied for?
Re: (Score:1)
Its a tax because they can.. pure and simple..
AND because its popular to hit "hollywood"...
AND because its a tax on the "elite"
Re: (Score:2)
"You have some money. Give it to us." That's pretty much why the tax was put together.
Though no doubt they still think of Netflix as something only rich people with computers do, so no problems, right?
Re: (Score:2)
Re: (Score:3)
Are you kidding? The problem is not that there's not enough tax revenue, but that they spend it on worthless things like starting foreign wars. Even when they do spend it on infrastructure, 90% of it goes to some middleman contractor, 10% actually ends up in buying materials, renting equipment and hiring people to do the work. They don't need more tax revenue, they need better people in charge.
Re: (Score:2)
They mean some logical reason for taxing Netflix. Some service being provided that the tax would cover.
Since when do tax dollars need to be directly spent on the service being taxed? What would you have taxed to build the first telecom line? Do you fund the US military by taxing only guns and bullets? How do you build new roads (because god knows the taxes on vehicles and fuels don't even cover maintenance of existing infrastructure).
Hey, you voted for em! (Score:2)
Re: (Score:1)
Chicago's population is declining, but it's middle and upper middle class population is increasing.
I don't think your comment is at all accurate. There might be some isolated population increases in some high-end pockets of the city, but overall property tax revenues are going down.
If tax revenues aren't going down because of routine tax increases, the the city's and the county's unfunded liabilities are still increasing at an unsustainable rate.
As for corporate HQ's: Yeah, McDonalds is heading downtown, but they're not moth-balling their suburban campus.
I just think Chicago's in a world of t
Amazon Prime (Score:2)
How does this work for Amazon Prime? The video streaming (and ebooks and music) are just one small part of the membership; a part that many members don't use at all.
Re: (Score:2)
Amazon probably paid (more) than the other streaming services, and thus managed to avoid their users being taxed. Probably a lot less than this streaming tax.
WHY??? better to sports betting and pot then more (Score:2)
WHY??? better to sports betting and pot then more taxes!!!!!
This isn't a "new" tax. (Score:2)
It's just that the already existing "amusement tax" is now being applied to streaming services which tried to get away with not paying it, because....internet.
Re: (Score:2)
My issue with this is that the state government really isn't supplying anything to justify the taxation. With the amusement tax you could argue police needed near theaters or whatever, the roads if you don't pay a gas tax, etc. But most of the internet lines weren't laid by the cities or states, the government is just imposing itself where it doesn't belong.
If I lived in Chicago... (Score:1)
But then I would never live or work in Chicago, so it's a moot point I suppose.
And yea, the cable companies revenge (Score:2)
Streaming taking their profits. Solution, stymie streaming by making sure a tax is placed on it.
Fuck Chicago fuck it hard (Score:2)
Title is false (Score:1)
The city of São Paulo, SP, Brazil, has been doing this since 2017:
https://www.tecmundo.com.br/me... [tecmundo.com.br]
Cry me a river (Score:2)
You know, you can like, do something else.
Works out to $4 per resident (Score:2)
I hate these tiny nickle and dime taxes. Grow a back bone voters, support a politician that raises taxes in an efficient way instead of supporting the best weasel. (note: I'm not blaming the politicians, I suspect they know all these little taxes are stupid. I'm also a little sympathetic to American voters
?? how do they know ?? (Score:2)
My assumption is they are expecting Sony and other to self numbers based on location data to the city?
Or is the city somehow monitoring it's broadband to see who is using what? The need for anonomizing services is becoming more and more apparent. Does anyone build cable modems or routers that can be configured to use TOR automatically ( it isn't perfect but a good first start)?
Nice for Musk (Score:2)
Stop doing business there (Score:2)