Challenge to Chicago’s streaming tax settled between the city and Apple

Apple and the City of Chicago agreed to settle a lawsuit dating back to 2018 in which the technology giant claimed the city’s 9% amusement tax on streaming video, music and news services was unconstitutional.

Many have been watching this case and awaiting its outcome. Without a clear ruling, it leaves the matter unanswered. At question was the constitutionality of Chicago’s streaming tax under due process and commerce clauses.

Judge Daniel Duffy ordered the dismissal with prejudice of Apple Inc. v. the City of Chicago and Reshma Soni, in her capacity as comptroller for the city (No. 1-2018 L 050514) on July 20, 2022. A status hearing had been scheduled for the same date.

Apple had claimed the tax was in conflict with the Internet Tax Freedom Act, which was signed into law by President Bill Clinton in 1998 and became permanent as part of the Trade Facilitation and Trade Enforcement Act of 2015.

Taxpayers with similar streaming services should review whether this 9% tax is applicable to them.

The Sales Tax Institute previously reported on this case in 2021 when Apple amended and expanded its complaint against Chicago’s streaming tax.

(Apple Inc., v. The City of Chicago and Reshma Soni, in her official capacity as Comptroller of the City of Chicago, No. 2018 L 050514)

Posted on August 11, 2022