This guest post was written by Travis J. Sabaitis, a student in the Entertainment Law and Web 2.0 course at Southwestern Law School.
It isn’t even Halloween yet, but already for those in the entertainment industry, a chill gust is blowing across the lake in Chicago: That’s because the cash-strapped Windy City has said it will adjust its amusement tax, which previously had been collected on items such as tickets to sporting events and live concerts.
The administration of fiery Mayor Emmanuel Rahm has decided to impose a new nine percent levy targeting those who access online “entertainments,” especially those who use popular cloud-based streaming websites; legal analysts say they know of no other local government in the U.S. that has pursued such a tax.
Consumers of television broadcasts, online video, sports programming, games, music, and any other entertainment content delivered electronically soon may have to fork over more money for their every day services. Companies like Netflix and Hulu will be subjected to the taxes on streaming services they offer and they say they will pass on directly these charges in the form of increased rates for consumers (according to a Netflix spokesperson).