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The Almighty Buck Businesses Sony United States Entertainment Technology

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.

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Chicago Becomes First City To Collect 'Netflix Tax'

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  • And next is... (Score:5, Insightful)

    by Mr D from 63 ( 3395377 ) on Monday May 20, 2019 @06:23PM (#58626290)
    More taxes. Easy ones like this that hurt the poor the most.
    • by Anonymous Coward

      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.

      • Itâ€(TM)s cute that you think that voters have much say in what happens in Chicago.
      • Re:And next is... (Score:5, Insightful)

        by Rockoon ( 1252108 ) on Monday May 20, 2019 @08:26PM (#58627014)

        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.

        • by AmiMoJo ( 196126 )

          Why was Obamacare not what the Democrats stand for? It seems like one of the most Democrat things Obama did.

          • Comment removed based on user account deletion
            • by AmiMoJo ( 196126 )

              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.

        • 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

          • Zero republicans voted for Obamacare.

            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?

            ..and calling is Romneycare when it was written by Democrats and passed in one of the bluest states in the union.... stop being a dishonest fuck. Romney was the governor, but 96% of the State legislature, the ones that wrote it, the one
    • 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)

        by Solandri ( 704621 )
        Flat taxes (like sales taxes) hurt the poor disproportionately. And this is a pretty flat tax. Progressive taxes are friendly to the poor, since they're paying a smaller share compared to the per capita tax burden. (There are also regressive taxes - where they poor pay more - but they're fairly rare. The argument goes that flat taxes on necessities like food and clothing are regressive, since the poor spend a greater share of their income on necessities.)

        Taxes on productivity and opportunity hurt the po

        • (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

          • (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?

      • by rtb61 ( 674572 )

        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

      • I already pay taxes on my internet service. What's the car analogy? Paying gas taxes so you can drive on toll roads?
    • 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.

    • I keep saying that we need to treat the government as though it has an addiction problem. Except the drug is tax dollars.

      • by hjf ( 703092 )

        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).

    • 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.

      • by flippy ( 62353 )
        Are you implying that it's OK to tax anything that isn't a necessity for keeping yourself alive?
    • 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?

    • Why would this hurt the poor more? This is the easiest tax to avoid. They could tax it at $500/mo and it wouldn't cost this poor person one cent. The people who complain the most about *these* particular $2 ... are likely to be heavily-entitled middle class people. They will pretend they can't find room for it in the budget between the iPhone and the F-350.
  • work-around ? (Score:4, Interesting)

    by jmccue ( 834797 ) on Monday May 20, 2019 @06:32PM (#58626338) Homepage
    what if you have a relative outside of Chicago ? Can you be on their plan (I do not do Netflix) ? Or how about a VPN ? Curious how that can be enforced, seems easy enough to avoid. Maybe even a PO Box would be enough.
  • age old story (Score:5, Interesting)

    by supernova87a ( 532540 ) <kepler1@NoSpaM.hotmail.com> on Monday May 20, 2019 @06:39PM (#58626394)
    I am reminded of the purported quote of Michael Faraday, upon being asked by the prime minister what his discovery / invention was good for, he replied:

    "Whatever it is, sir, I have no doubt you will find a way to tax it."
  • Move (Score:2, Insightful)

    by AHuxley ( 892839 )
    Find a really great part of the USA with no new tax on streaming entertainment services.
    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.
  • 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)

    by grasshoppa ( 657393 ) on Monday May 20, 2019 @07:09PM (#58626536) Homepage

    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?

    • by Anonymous Coward

      Its a tax because they can.. pure and simple..

      AND because its popular to hit "hollywood"...
      AND because its a tax on the "elite"

    • 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?

      "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?

    • by Lehk228 ( 705449 )
      the most corrupt city in america does not need logic to take your money, there is a brother in law or cousin who needs that no-bid contract
  • Illinois has a DECLINE in population. I know a friend of mine & his wife moved a couple years ago from "the people's republic of illinois, just west of Chicago, and said his property tax DROPPED about 60% of what it was. The only people left in the Chicago area will be the ones gunning each other down daily. Tax and spend, that's all they know how to do.
  • 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.

    • by zkiwi34 ( 974563 )

      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 taxes!!!!!

  • 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.

    • 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 and I was faced with this tax, I would cancel my subscriptions. If I could, I would have a relative or friend subscribe and then login with their un/pw.

    But then I would never live or work in Chicago, so it's a moot point I suppose.
  • Streaming taking their profits. Solution, stymie streaming by making sure a tax is placed on it.

  • A 9% tax? I'll add this to my many reasons to say FUCK Chicago! Last weekend 14 people were shot and 4 killed in JUST THE WEEKEND. So once again I say FUCK CHICAGO!
  • The city of São Paulo, SP, Brazil, has been doing this since 2017:
    https://www.tecmundo.com.br/me... [tecmundo.com.br]

  • No one is being forced to binge watch NF or Amazon.
    You know, you can like, do something else.
  • How much did it cost implement, run, enforce and how much is this tax going to inconvenience people? Hell how much city council time went into debating this? The city's revenue is almost 9 billion.
    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
  • 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)?

  • When I think about people taxing or otherwise attempting to regulate my online activities, the first notion that comes into my mind is a direct connection to a satellite that links me to a VPN. I can't be the only one. These taxes should mean extra extra customers for Starlink.
  • Companies need to send a strong message by refusing to do business in Chicago and being very clear about why when the Chicago customer shows up at their website for something. If Chicago's tax results in a ban from Netflix for anyone that lives in Chicago, I bet you see the tax dry up real damned quick.

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