PlayStation just announced that due to a new “amusement tax,” any person with a billing address in Chicago will have to pay a 9 percent tax on essentially anything purchased through PlayStation, Steam, and other online services. That’s right, you can now be taxed for having fun in the privacy of your own home, and gamers are outraged.
Many cities have a so-called “amusement tax,” including cities in Pennsylvania, Maryland, Tennessee, Florida, and Wisconsin. But most states focus on taxing things like arcade games or music venues. The tax imposed in Chicago specifically targets digital media, such as the games themselves or access to participation (such as PlayStation Plus).
According to the tax ruling, the amusement tax classifies “Amusement” as meaning: (1) any exhibition, performance, presentation, or show for entertainment purposes, (2) any entertainment or recreational activity offered for public participation or on a membership or other basis, and (3) any paid television programming. The full list as they wrote it is below:
Chicago’s existing amusement tax was intended to impose taxes on streaming services like Netflix and Hulu. However, the recent expansion covers almost all online media, including “shows, movies or videos…delivered to a patron (i.e., customer) in the City,” “Listening to electronically delivered music,” and “The privilege of participating in games, on-line or otherwise.” Any service that falls under these categories will now have to have the 9 percent tax. So, if the average game costs $60, each will now average about $66, not including all the other taxes imposed on the people of Chicago.
Not only does this affect PlayStation users, but also Steam users, and Xbox users have been paying this tax since last year. It is not the best time to be a gamer. Lately, gamers have felt bombarded by annoyances such as game companies increasing micro-transactions to try to squeeze every last penny out of their users, and being socially tarred as sexist, racist pigs due to video game design and a largely male user base. Now they are being singled out by Uncle Sam.
Gamers have taken to Reddit to express feelings of shock and disgust, as well as discuss what this means for the future of gaming. Reddit user Mulligen87 said “Chicagoan here. We already have one of the highest tax rates in the country ‘cause we have to pay a state, county, and city tax on top of whatever we buy. Looks like I might be traveling out to the suburbs more now to have fun. When a city is both broke and corrupt, they’re gonna tax you in every way possible.”
Reddit user Mrvorhees argued there is a huge difference between “A tangible product being taxed – like marijuana, alcohol, and cigarettes, and the tax of an experience, which in my opinion are totally different. By being called an ‘amusement tax’ the city of Chicago is claiming they are owed funds because of an experience that you are enjoying.”
Gamers are not the only ones looking to fight the insanity. The tax will also deeply affect Apple’s revenue from music sale and streaming services. The good news is that they have decided to take action. Apple is in the process of taking the city of Chicago to court.
They filed a complaint with the Cook County Circuit Court on the grounds that this tax is actually against the federal law. The Internet Tax Freedom Act, signed into law by President Bill Clinton in 1998, prevents “state and local governments from taxing Internet access, or imposing multiple or discriminatory taxes on electronic commerce.” They are using this as their main argument that the tax is illegal and must be lifted.
Is this kind of targeted taxation the future of gaming, and ultimately the future of the country? Only time will tell if companies and the gaming community can fight back against the system. If they do not succeed, who and what are they going to tax next?