The holiday season is meant for family fun and making special memories, but Chicago’s steep 9% amusement tax digs into the season of giving.
Rather, it digs into your giving. In a city where politicians put “new ways to tax” permanently atop their wish lists, it is a bounty.
The tax is applied far and wide – to movie theaters, concerts and sporting events. It also applies to anyone who wants to stay home and simply stream a Hallmark holiday movie.
Why? Chicago’s 9% amusement tax extends to all “amusements that are delivered electronically.” If you stay home and watch a movie, you get hit with the same tax you would if you were seeing it in a theater.
It’s not just Netflix and Hulu. Staying home to listen to your favorite holiday songs on Spotify, Apple Music or Pandora comes with the same 9% amusement tax per month: a gift that keeps on taking
It’s no surprise the city broadened its definition of “amusement.” The tax generated $232 million in revenue during 2022, up from $146 million in 2015 when streaming services were first included.
Chicago’s tax laws imply baking cookies in your home with Michael Bublé in the background somehow puts a burden on the city. Your holiday moment needs to be taxed at the same rate as if you were buying a ticket to see him live with thousands of other people?
Large, in-person gatherings are indisputably amusement. They come with more people taking public transportation and needing police for large crowds.
Rather than spreading holiday cheer, Chicago’s amusement tax excessively burdens residents trying to celebrate the season. It makes enjoyable activities such as ice skating at Wrigley Field more elusive for families facing tough times.
Even more bizarre, digitally buying a movie or song isn’t considered amusement, just rentals and subscriptions. That peculiarity turns a “Home Alone” DVD into a tax loophole.
Chicago is the first city in the nation to apply such a tax to streaming services, according to the National Taxpayers Union Foundation. There’s no shame in experimenting with an idea first – unless you refuse to acknowledge when it’s gone too far.
New York City is considering its own “Netflix tax.” If it passes it would be at a 4% rate, which is the same tax applied to concerts and sporting events. That’s a lot less greedy than Chicago’s 9%.
As Chicago faces significant financial hurdles, increasing taxes can look like an easy solution. But city leaders need to reconsider the invasive standard of taxing amusement at home or of imposing a tax that disproportionately hits those less able to afford a big night out. It’s tough to imagine a Chicagoan in favor of taxing their home entertainment, but the amusement tax brings in enough money to tune out the voices of the people it hurts.
Chicago needs solutions that don’t always reach deeper into residents’ pockets, especially during the season of giving. The city’s finances frequently make the naughty list, but it doesn’t earn the right to treat residents like a scrooge.