Apple plans to collect additional "Netflix tax" in Chicago

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Apple is now poised to collect the amusement taxes from subscribers of its services in Chicago. The planned move is to take effect next month after the city and Apple settled a lawsuit over the so-called “Netflix tax” for digital platforms imposed on the area. It is unknown if this will also affect the future pricing of Apple’s services.

TL;DR

  • Apple will start collecting “Netflix tax” from its subscribers in September.
  • The affected services include Apple TV+, Music, and Arcade.
  • Pricing of Apple services may be affected.

According to Seeking Alpha, Apple will become a tax collector for its digital consumers in Chicago starting in September. The affected subscription offerings are Apple Music, Apple TV+, and Apple Arcade. Subscribers of Apple News+ are exempt from this initiative.

The supposed “Netflix tax” has been in effect in the city since 2015 through an ordinance. It requires streaming companies to pay an additional 9 percent municipal tax. Providers like Netflix and Spotify have been impacted since the implementation of the regulation. But despite the backlash and lawsuits, other prominent names have been heeding the city for some time now. For instance, Sony paid $1.2 million for the PlayStation video live and music purchases in early 2019.


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Pricier Apple subscriptions?

To date, it is not clear if the Cupertino giant is going to adjust its pricing for the affected services once it begins its tax collection. But if ever they will transfer the additional costs to their subscribers, the resulting price adjustments could be minimal. 

Although at a smaller percentage, some states in the US have been planning to enforce the same tax regulation.  These governments target major streaming services such as Netflix, Hulu, Disney, and Amazon. Of course, this could also trickle down to other providers like Apple and Microsoft with its Xbox.

What are your thoughts on the additional taxes for streaming apps? Hit us up in the comment section.


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