Apple withdraws proceedings over 'Netflix tax' that imposes taxes on streaming service users
Apple and Chicago have been at odds with each other over the introduction of the so-called 'Netflix tax,' which imposes taxes on streaming service users, but they have finally settled.
Apple, Chicago Settle Challenge to City's Streaming Tax – The Hollywood Reporter
In 2015, Chicago, located in Cook County, Illinois, USA, introduced the so-called 'Netflix tax,' which imposes an additional 9% on users of streaming services. This is an extension of the 'city tax on recreational activities and concert tickets' in Chicago to digital services, mainly streaming services. The Netflix tax introduced by Chicago will be levied not only on Netflix but also on all streaming services such as Disney +, Spotify and Amazon Prime Video.
In response, Apple filed a lawsuit against Chicago in 2018 for violating the US Constitution's commerce and due process provisions and the Federal Internet Tax Freedom Act, which prohibits the imposition of discriminatory taxes on e-commerce. Did. In the proceedings, Apple said, 'Customers are subject to illegal taxes.' 'If Apple does not collect taxes from customers, Apple will not have the authority to impose or enforce any taxes. You will be directly responsible, 'he complains.
Not only Apple was dissatisfied with the Netflix tax, but users of streaming services such as Netflix, Hulu, and Spotify also filed separate proceedings against Chicago. Chicago won the court ruling that 'Chicago's Netflix tax does not violate the Internet Tax Freedom Act.' During this time, Apple's proceedings remained on hold for nearly two years.
Following the decision in the Chicago and Streaming Users proceedings, Apple amended the complaint by saying, 'It is illegal to impose taxes only on certain services,' but the Cook County Circuit Court in charge of the trial. Judge Daniel Duffy dismissed Apple's complaint.
And newly, it's clear that Apple has chosen not to complain about the dismissal of the proceedings. It is speculated that Apple withdrew the proceedings to avoid being sentenced to 'the taxes levied on streaming services are evidence-based.' Like Apple, Sony has sued Chicago for Netflix tax, but like Apple, it has withdrawn the proceedings.
According to Bloomberg's analysis, Chicago will collect more than $ 30 million from users as a Netflix tax in 2021.
The reason local governments like Chicago are trying to tax streaming services is that streaming services like Netflix are now occupying most of the traffic on the Internet, which is the public infrastructure. In such a situation, it is necessary to lay a new cable to improve the Internet line, but it is strange that the public infrastructure will bear the cost, local governments The side is insisting. Such claims have also been raised by Internet Service Providers (ISPs).
ISP claims that 'Netflix, which accounts for the majority of Internet traffic, should pay network usage fees' --GIGAZINE
However, in most cases, the streaming service has won the court battle between the local government and the streaming service. The reason is that the court has ruled that 'streaming services do not use public wires, cables and equipment to provide services, so no additional charges can be levied.'
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