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ESA launches lawsuit against Chicago for its tax on online games

ESA launches lawsuit against Chicago for its tax on online games

June 5, 2017 | By Alissa McAloon

The Entertainment Software Association is taking legal aim against an amusement tax put in place by the city of Chicago that levies a tax on, among other things, streaming and subscription services that target online entertainment.

While streaming music and television are also affected, the ESA’s complaint deals primarily with the fact that the tax would charge Chicago residents an additional 9 percent to participate in online games or use a streaming game service. 

The association’s position is that the tax unfairly targets online entertainment and in turn violates the Internet Tax Freedom act.

The court documentation detailing the lawsuit also states that such a tax negatively impacts members of the ESA by forcing those companies to collect the tax and essentially charge Chicago citizens more for using online game-related services. 

“This discriminatory tax makes Chicagoans’ lives more expensive, just because they live in the 21st century and choose to play video games online,” said ESA CEO and President Michael D. Gallagher in a statement. “As one of the most innovative and rapidly growing industries in Illinois, we are proud to take this fight to court and stand up for consumers.”

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