Apple will start collecting 'Netflix tax' in September

Posted:
in General Discussion edited August 16
Apple will begin collecting taxes on Apple TV+ subscriptions within Chicago as part of its settlement relating to the city's 2015 Amusement Tax.

Tim Cook launching Apple TV+
Apple TV+


In July, Apple gave up its four-year fight against Chicago's so-called "Netflix Tax." The tax requires the tech giant to pay a 9% tax on streaming service income earned from Chicago subscribers.

According to Bloomberg Law, Apple has agreed to collect the tax, starting September 15, from customers in Chicago. As part of the settlement, Apple will not need to pay back taxes.

In 2015, Chicago introduced a change to its Amusement Tax that placed a 9% tax on streaming entertainment services. Also referred to as a "Netflix Tax" and impacting services like Netflix, Spotify, and Apple's own Apple TV+.

Three years later, Apple filed a lawsuit against the city, arguing the tax violated the federal Internet Tax Freedom Act and the U.S. Constitution's commerce and due process laws. The case hung in courts for more than two years.

Eventually, Chicago won the trial. Afterward, Apple amended its complaint to say that case was a "facial challenge" to the tax program but that Apple was challenging how the tax was applied to its own services.

Cook County Circuit Court Judge Daniel Duffy dismissed the lawsuit. He declared that Apple's filing was an insufficient challenge and gave Apple leave to file an amended complaint.

Apple chose to settle rather than file an amended complaint.

Read on AppleInsider

Comments

  • Reply 1 of 18
    22july201322july2013 Posts: 3,060member
    Does Netflix have to pay the same tax if they bill their users directly?
    watto_cobra
  • Reply 2 of 18
    That’s a lot of tax. 
    watto_cobra
  • Reply 3 of 18
    davidwdavidw Posts: 1,646member
    Does Netflix have to pay the same tax if they bill their users directly?

    It's not Apple that has to pay the tax. It's the subscribers to the streaming service that has to pay the tax. And the tax is not levied to streaming subscribers, in all States. It depends on each State sales tax laws and how it's applied. Or whether there are specific taxes that applies to digital streaming services, like the "Amusement tax" in IL and NY. Some "Netflix tax" are only local and not Statewide.



    Here is CA, there is no State "Netflix tax" on streaming services, yet. Streaming services are considered intangible goods and not subject to any sales tax in CA. But there might be  a local "Netflix tax". Like how Netflix subscribers in Chicago has to pay the "Amusement tax". Netflix would have to collect the tax and remit it to the State (or county). Like what Apple has to do in Chicago. It's the State (or county) that is charging the consumers the tax. The tax is not being charged to the streaming providers. The providers just has to collect it for the State (or county). Much like a retail store collecting the sales tax.


    edited August 16 forgot usernameFileMakerFellerwatto_cobra
  • Reply 4 of 18
    davidwdavidw Posts: 1,646member
    Does Netflix have to pay the same tax if they bill their users directly?
    Just to be clear. The lawsuit was requiring Apple to pay the 9% "Amusement tax" since Apple has not been billing and collecting the tax from their Apple streaming subscribers. Much like how if a retailer do not collect the sales tax on the taxable goods they sell, they are still responsible for paying to the State, the sales tax on it. Since Apple was fighting this tax, they were not billing and collecting any "Amusement tax". The settlement is that Apple will now bill and collect the "Amusement tax" from their streaming subscribers and remit it to the State. And Apple will no longer be liable to pay back the 9% "Amusement tax" that they didn't bill and collect from their streaming subscribers, during the time this suit was in the courts.  
    jas99FileMakerFellerwatto_cobra
  • Reply 5 of 18
    uraharaurahara Posts: 664member
    It seems that I work hard, earn money, the government takes part of it from me.
    Now i want to relax and enjoy, restore my energy (so that i could work hard again and pay taxes), and government makes it even more expensive for me (and thus more difficult to do).
    So my energy restoration is diminished, my productivity is lower, I earn less, and pay less income taxes. 
    Tell me who is the winner in this situation?

    It seems only who is better off from this ‘Amusement tax’ are layers. 
    FileMakerFellerwatto_cobra
  • Reply 6 of 18
    uraharaurahara Posts: 664member
    Air taxes are the next. If you are breathing - pay taxes for each breath you take.
    watto_cobra
  • Reply 7 of 18
    AppleZuluAppleZulu Posts: 1,396member
    urahara said:
    It seems that I work hard, earn money, the government takes part of it from me.
    Now i want to relax and enjoy, restore my energy (so that i could work hard again and pay taxes), and government makes it even more expensive for me (and thus more difficult to do).
    So my energy restoration is diminished, my productivity is lower, I earn less, and pay less income taxes. 
    Tell me who is the winner in this situation?

    It seems only who is better off from this ‘Amusement tax’ are layers. 
    Nobody likes paying taxes. Also, nobody volunteers to fix potholes and definitely nobody shrugs and says “c’est la vie” if their house is on fire and nobody answers the 911 call. 
    thtJaiOh81jas99watto_cobra
  • Reply 8 of 18
    The government loves hiding taxes in small bills that add up over time. You are foolish to explain away the overreaching taxation by government as necessary to fix pot holes and put out fires. There is massive waste in government spending.
    jcs2305dougboariwatto_cobra
  • Reply 9 of 18
    kestralkestral Posts: 283member
    Obama's state is a failed state.
    JeepGuywatto_cobra
  • Reply 10 of 18
    However noble the goals when it's set up, eventually government's sole purpose becomes to sustain itself.
    watto_cobra
  • Reply 11 of 18
    AppleZuluAppleZulu Posts: 1,396member
    tedz98 said:
    The government loves hiding taxes in small bills that add up over time. You are foolish to explain away the overreaching taxation by government as necessary to fix pot holes and put out fires. There is massive waste in government spending.
    Yes, that is indeed the oft-repeated mantra of people who don't want to pay taxes but also demand immediate and thorough government response for whichever things are important to them at the moment.
    jas99watto_cobrakurai_kage
  • Reply 12 of 18
    AppleZuluAppleZulu Posts: 1,396member
    However noble the goals when it's set up, eventually government's sole purpose becomes to sustain itself.
    However noble the goals when it's set up, eventually a private enterprise's sole purpose becomes to sustain itself.
    edited August 17 croprjas99FileMakerFellerwatto_cobra
  • Reply 13 of 18
    Keep voting Democratic and then complain about made up taxes and "fees" hence more taxes. Makes sense. 
    watto_cobra
  • Reply 14 of 18
    JeepGuy said:
    Keep voting Democratic and then complain about made up taxes and "fees" hence more taxes. Makes sense. 
    You would prefer to vote in an undemocratic process?
    watto_cobra
  • Reply 15 of 18
    davidwdavidw Posts: 1,646member
    AppleZulu said:
    urahara said:
    It seems that I work hard, earn money, the government takes part of it from me.
    Now i want to relax and enjoy, restore my energy (so that i could work hard again and pay taxes), and government makes it even more expensive for me (and thus more difficult to do).
    So my energy restoration is diminished, my productivity is lower, I earn less, and pay less income taxes. 
    Tell me who is the winner in this situation?

    It seems only who is better off from this ‘Amusement tax’ are layers. 
    Nobody likes paying taxes. Also, nobody volunteers to fix potholes and definitely nobody shrugs and says “c’est la vie” if their house is on fire and nobody answers the 911 call. 
    It's not about not paying taxes but being over taxed. Just because taxpayers complain about having to pay more taxes. it doesn't mean that they don't want to pay any taxes at all, for the government services they need and want the government to supply. 

    Why is it that everytime someone complains about paying more taxes, people like you cry like Chicken Little yelling "the sky is falling". Why is it that the libraries and playgrounds must close, if we don't approve paying more taxes? Or the Fire Dept. will no longer have the funds to come to come to our home to put out a fire? Or our 911 calls will go unanswered? Why is it always the services that most taxpayers needs, wants and are willing to pay taxes for, that will suffer it we don't pay more taxes? Why isn't the government first going after all the tax money that is wasted, rather than reaching deeper into taxpayers pocket? 

    I would not be surprise if CA government waste more of taxpayers money, than some States whole budget.

    this is just the tip of the iceberg ..... 

    https://www.mtdemocrat.com/opinion/guest-column-roundup-of-wasted-taxpayer-money/

    https://www.hoover.org/research/california-legislators-spend-200-billion-and-taxpayers-get-less-and-less

    https://www.independent.org/publications/cagoldenfleece/

    About the only taxpayers that gets their moneys worth from paying taxes are the union public employees, plus elected and appointed public officials. 

    https://www.forbes.com/sites/adamandrzejewski/2020/05/19/why-california-is-in-trouble--340000-public-employees-with-100000-paychecks-cost-taxpayers-45-billion/?sh=261be83b5fb8

    And speaking of fixing potholes and why they don't get fix in CA, even though CA is one of the State with the highest gas tax, in the Nation.

    https://reformcalifornia.org/yes-on-6-releases-top-10-worst-examples-of-waste-fraud-and-abuse-of-gas-tax-funds-in-caltrans-and-local-transportation-agencies/

    The City and County of SF have a population of 850,000, is only 49 square miles and a $14B annual budget. A budget bigger than about a dozen States. With that much tax money, SF should remind you of Singapore or Dubai. But instead, a good part of it will remind you of the slums of New Delhi.  Don't tell us public services like libraries, playgrounds, fire, police, 911, public transportation, clean streets, etc, has to suffer, unless we pay more taxes because there is no waste in tax spending.

    https://www.hoover.org/research/only-san-francisco-61000-tents-and-350000-public-toilets

    SF spends abut $1B on homelessness and this is one of their solution. The SF politicians must look out their office windows in City Hall daily and pat each other on the back for a job well done. 

    https://www.sfexaminer.com/archives/sf-s-first-sanctioned-camping-site-for-the-homeless-gives-residents-a-safe-place-to/article_0a29c011-f66e-538e-a996-abef83157f02.html

    Look at it this way. Suppose you gave your kid $50 a week to buy lunch at his school cafeteria. Then on Wednesday of one week, he ask for another $20 so he can buy lunch on Thursday and Friday. So you asked him what happened to the $50 he got on Monday? And he told you he spent $20 of it on a cool virtual outfit while playing Fortnite. Now, would you just hand him the $20 and then increase his lunch money to $70 next week, to reward him for wasting some of his lunch money? Well, that's what the government wants taxpayers to do. 




    edited August 18 muthuk_vanalingamstompy
  • Reply 16 of 18
    davidwdavidw Posts: 1,646member
    tedz98 said:
    The government loves hiding taxes in small bills that add up over time. You are foolish to explain away the overreaching taxation by government as necessary to fix pot holes and put out fires. There is massive waste in government spending.
    How about this one as part of the Inflation Reduction Act, that POTUS Biden just signed.

    https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf

    https://www.washingtonpost.com/business/the-1percent-tax-on-stock-buybacks-is-just-the-start/2022/08/17/8bd011a0-1e1c-11ed-9ce6-68253bd31864_story.html
  • Reply 17 of 18
    AppleZulu said:
    However noble the goals when it's set up, eventually government's sole purpose becomes to sustain itself.
    However noble the goals when it's set up, eventually a private enterprise's sole purpose becomes to sustain itself.

    The goal of private enterprise is always to sustain itself.  Any other goal is folly.
  • Reply 18 of 18
    hexclockhexclock Posts: 1,072member
    Call it what it is. Theft. 
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