Illinois judge dismisses Apple's challenge to Chicago 'Netflix Tax'
Apple's attempt to shake off Chicago's Amusement Tax in the courts on streaming has been dismissed, though the iPhone maker still has the opportunity to refile and try to rid itself of the 9% tax.
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+ and Apple Music, the iPhone maker has attempted to overturn the initiative.
On Friday, Cook County Circuit Court Judge Dan Duffy granted a motion by Chicago to dismiss Apple's lawsuit against the Amusement Tax, reports Bloomberg Law. The granted motion effectively ends the current round of litigation, but doesn't stop it completely.
Judge Duffy's order dismisses the complaint without prejudice, with the addition that Apple's legal team could file a second amended complaint within 35 days to keep the lawsuit alive.
In his order, Duffy says Apple isn't required to present any evidence at this time, but it still "must plead facts" to sufficiently state a cause of action, upon which some form of relief could be granted.
The Judge's declaration is in relation to Apple's original 2018 lawsuit, which said the tax violated the federal Internet Tax Freedom Act, as well as the U.S. Constitution's commerce and due process laws. That lawsuit was paused for more than two years while courts handled a related lawsuit against Chicago by users of Netflix, Hulu, and Spotify.
While Chicago won that trial, 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.
However, Judge Duffy found it was an insufficient challenge, due to Apple's complaint not being specific enough to be used in arguments over whether the Amusement Tax is constitutionally valid.
Read on AppleInsider
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+ and Apple Music, the iPhone maker has attempted to overturn the initiative.
On Friday, Cook County Circuit Court Judge Dan Duffy granted a motion by Chicago to dismiss Apple's lawsuit against the Amusement Tax, reports Bloomberg Law. The granted motion effectively ends the current round of litigation, but doesn't stop it completely.
Judge Duffy's order dismisses the complaint without prejudice, with the addition that Apple's legal team could file a second amended complaint within 35 days to keep the lawsuit alive.
In his order, Duffy says Apple isn't required to present any evidence at this time, but it still "must plead facts" to sufficiently state a cause of action, upon which some form of relief could be granted.
The Judge's declaration is in relation to Apple's original 2018 lawsuit, which said the tax violated the federal Internet Tax Freedom Act, as well as the U.S. Constitution's commerce and due process laws. That lawsuit was paused for more than two years while courts handled a related lawsuit against Chicago by users of Netflix, Hulu, and Spotify.
While Chicago won that trial, 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.
However, Judge Duffy found it was an insufficient challenge, due to Apple's complaint not being specific enough to be used in arguments over whether the Amusement Tax is constitutionally valid.
Read on AppleInsider
Comments
Not a lawyer, but it certainly seems bogus and discriminatory to single out streaming services. If the tax is valid everything going through the internet pipes should be taxable. I thought (could be wrong) that no state could tax interstate commerce and it seems moving data between states is interstate commerce.
The Judge was a Cook County Judge, not state or Federal. I would be surprised to see this hold up as it moves up the judicial ladder toward Federal courts.
The "Sweetened Beverage Tax" was 1cent per ounce. So that 99cent 64oz slurpee was hit was a 64% tax!
This is a tax you pay, not Apple.