Chicago’s New PlayStation Tax Shows How Greedy Politicians Can Be - Foundation for Economic Education - Brittany Hunter:
November 14, 2018 - "PlayStation 4 users in Chicago were shocked when they turned on their consoles and saw a message from Sony. The message informed users that as of November 14, 2018, they would be required to pay a 9 percent 'amusement tax' for PlayStation subscriptions such as PlayStation Now, PlayStation Plus, PlayStation Music, and others....
"The amusement tax was actually passed several years ago and included almost all forms of entertainment. Whether residents are looking to spend an evening at the theater, see a concert, cheer on their favorite sports team, go to a nightclub, or even catch a movie, they are on the hook for an additional 5 percent tax. In 2015, the amusement tax was expanded ... with the creation of a 'cloud tax' ... the city began instituting a 9 percent tax for using platforms like Netflix, Hulu, Spotify, and others. And thanks to the inclusion of the streaming services, the amusement tax now brings in about $12 million annually. It also applies to anyone whose billing address is within city limits.
"Sony actually refused to enforce the tax and did not finally capitulate to the city’s wishes until mid-November.... While it is unclear why Sony decided to begin enforcing the tax at this time, it is likely that statements from government representatives scared the company into submission....
"Right after the 'cloud tax' was instituted, the Liberty Justice Center came forward to challenge the city’s new policy.... Unfortunately, the court ruled in favor of the city in May....
"Just a few months after the same court ruled in favor of the city, Apple filed a complaint in the Circuit Court of Cook County, Illinois. The tech company’s complaint touches on four different violations it believes the city is guilty of committing. But the primary complaint rests on Chicago’s violation of the Internet Tax Freedom Act (ITFA).
"In 1998, President Bill Clinton signed the ITFA into law, protecting Americans from illegal forms of taxation. Specifically, the bill prohibited 'state and local governments from taxing Internet access, or imposing multiple or discriminatory taxes on electronic commerce'.... For example, if internet users are already being taxed for their internet service, they should not be forced to then pay further taxes for using the internet to access streaming sites....
"Apple is also asserting that the new tax is a violation of the Illinois constitution.... Since the cloud tax is extended to everyone with a Chicago billing address, this means it is ... being levied on those who enjoy streaming services outside city limits, making it a violation of state law....
"Apple’s additional complaints involve violations of the federal commerce clause, as well as violations of the 14th Amendment right to due process. While the outcome of the case is unclear, Apple’s unwillingness to cooperate with the city’s ridiculous amusement tax is a testament to its integrity."
Read more: https://fee.org/articles/chicago-s-new-playstation-tax-shows-how-greedy-politicians-can-be/
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November 14, 2018 - "PlayStation 4 users in Chicago were shocked when they turned on their consoles and saw a message from Sony. The message informed users that as of November 14, 2018, they would be required to pay a 9 percent 'amusement tax' for PlayStation subscriptions such as PlayStation Now, PlayStation Plus, PlayStation Music, and others....
"The amusement tax was actually passed several years ago and included almost all forms of entertainment. Whether residents are looking to spend an evening at the theater, see a concert, cheer on their favorite sports team, go to a nightclub, or even catch a movie, they are on the hook for an additional 5 percent tax. In 2015, the amusement tax was expanded ... with the creation of a 'cloud tax' ... the city began instituting a 9 percent tax for using platforms like Netflix, Hulu, Spotify, and others. And thanks to the inclusion of the streaming services, the amusement tax now brings in about $12 million annually. It also applies to anyone whose billing address is within city limits.
"Sony actually refused to enforce the tax and did not finally capitulate to the city’s wishes until mid-November.... While it is unclear why Sony decided to begin enforcing the tax at this time, it is likely that statements from government representatives scared the company into submission....
"Right after the 'cloud tax' was instituted, the Liberty Justice Center came forward to challenge the city’s new policy.... Unfortunately, the court ruled in favor of the city in May....
"Just a few months after the same court ruled in favor of the city, Apple filed a complaint in the Circuit Court of Cook County, Illinois. The tech company’s complaint touches on four different violations it believes the city is guilty of committing. But the primary complaint rests on Chicago’s violation of the Internet Tax Freedom Act (ITFA).
"In 1998, President Bill Clinton signed the ITFA into law, protecting Americans from illegal forms of taxation. Specifically, the bill prohibited 'state and local governments from taxing Internet access, or imposing multiple or discriminatory taxes on electronic commerce'.... For example, if internet users are already being taxed for their internet service, they should not be forced to then pay further taxes for using the internet to access streaming sites....
"Apple is also asserting that the new tax is a violation of the Illinois constitution.... Since the cloud tax is extended to everyone with a Chicago billing address, this means it is ... being levied on those who enjoy streaming services outside city limits, making it a violation of state law....
"Apple’s additional complaints involve violations of the federal commerce clause, as well as violations of the 14th Amendment right to due process. While the outcome of the case is unclear, Apple’s unwillingness to cooperate with the city’s ridiculous amusement tax is a testament to its integrity."
Read more: https://fee.org/articles/chicago-s-new-playstation-tax-shows-how-greedy-politicians-can-be/
'via Blog this'
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