Illinois lawmakers are considering a five percent tax on streaming online services and satellite television.
The legislation, sponsored by Deputy Majority Leader Art Turner, D-Chicago, would tax the providers of streaming services like Roku and satellite services like DirecTV on 5 percent of their gross profits. It would also tax the subscribers one percent “for the privilege to witness, view, or otherwise enjoy the entertainment.”
Orland Hills Village Administrator Conrad Kiebles said he supports the tax. He told lawmakers in a House Revenue and Finance Committee that the new stream of tax dollars should be split 50-50 with the municipalities to shore up their budgets.
“We have upgraded our technology. We have increased our competition but we have never updated our statutes to keep up with the times,” he said. “It offers the most equitable way to add an additional $200 million in revenue into our coffers and add parity to competing services in our local communities.”
Chicago currently imposes a “Netflix Tax” on streaming services, but it’s been challenged by multiple entities in court. Those challenges claim it runs afoul of the Internet Tax Freedom Act or is outright unconstitutional.
State Rep. Joe Sosnowski, R-Rockford, worries that the state’s residents already shoulder one of the highest tax burdens in the nation so they should think carefully before adding a new one.
“We’re already taxing people at a very high rate with Illinois being one of the highest in the nation in overall tax burden,” he said. “When we talk about this and our total tax liability, we have to be very careful.”
The legislation will get another hearing, with a possible vote, Thursday.