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"gewg_" writes:

from the tax-ALL-the-things dept.

TechDirt reports [techdirt.com]

Back in July we noted [techdirt.com] how the city of Chicago was hoping to cash in on streaming services by imposing a new tax on Netflix [...] expanding [the city's] 9% "amusement tax" authority (traditionally covering book stores, music stores, ball games, and other brick and mortar entertainment) to cover any service that interacts with the cloud. While the new ruling was supposed to technically take effect September 1, Chicago recently announced it was postponing portions of the new tax until next year [cityofchicago.org][1] to field criticism and manage plan logistics.

While Chicagoans wait, the city's now on the receiving end of a new lawsuit [documentcloud.org] (pdf) by the Liberty Justice Center, which claims that Chicago is violating the law in two ways:

One, the lawsuit claims that the city aldermen violated city rules by not holding a full vote on the changes.

Two, the lawsuit states that Chicago's tax grab also violates the Internet Freedom Tax Act, which prohibits local, state, and federal governments from enacting "internet taxes".

The plaintiffs are quick to note that actually putting the idea to a public vote likely wouldn't end well for the city [chicagotribune.com]:

"No aldermen voted on this tax. It never went before the Chicago City Council, which makes the so-called 'Netflix tax' an illegal tax", Jeffrey Schwab, an attorney with the Liberty Justice Center, said in a news release Thursday. "If the city wants to tax Internet-based streaming media services, then it should put the measure through the political process, and let Chicagoans have their voices heard through the democratic process."

[1] Note to web guys: Center-justified pages look like they were constructed by retarded 8 year olds.

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