Chicago’s Amusement Tax isn’t new. The tax was first implemented in the city in 2015, a tax targeted at “patrons of amusement” that specifically included digital services. At the time, the reach of the tax was somewhat limited, focusing on streaming services like Netflix and Spotify, but has since expanded to other services as the legal guidance of the tax grew more established. Sony has avoided the tax requirement so far, though the reasons why are unclear.
If the Chicago Amusement Tax wasn’t enough to frustrate citizens of the city, in 2017 the state government of Illinois passed an amendment as part of its budget to expand the effective 6.25% sales tax to a broader range of online services. It’s unclear how the state’s sales tax has shifted pricing on PlayStation since the amendment passed.
For Chicagoans, it’s unlikely that the amusement tax will disappear or be changed in the immediate future. But there remains some hope, as both Apple and Netflix are pursuing lawsuits against the city in opposition to the amusement tax. Apple’s suit claims that the amusement tax not only violates the state and US constitutions, but also the 1998 Internet Tax Freedom Act that bars all tiers of government from targeting Internet-only taxes.
The current state of Apple’s lawsuit is unclear, but considering the breadth of the suit, it’s likely to be a lengthy and expensive effort. Considering Chicago’s amusement tax brings in a reported $12 million annually, it’s possible that Apple’s lawsuit alone could cost more than what the tax brings in.
Nevertheless, starting November 14 PlayStation console owners in Chicago will start being charged an additional 9% on purchases made through the PlayStation Store.
Source: David Lee Matthews – Twitter
