The Entertainment Software Association, the trade association that represents the US video game industry, has filed a lawsuit against the City of Chicago in response to an expanded amusement tax the city government imposed back in 2015.
The expanded amusement tax would lead Chicago residents to pay an additional 9 percent tax on streaming and subscription services including online game communities, specific online games, and game library subscriptions.
ESA President and CEO Michael D. Gallagher said in the announcement:
This discriminatory tax makes Chicagoans’ lives more expensive, just because they live in the 21st century and choose to play video games online. 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. Chicago’s tax bureaucrats are out of line in extending their reach beyond legal limits imposed by federal law. We intend to remedy that situation.
According to the ESA, the expanded amusement tax violates the Internet Tax Freedom Act and is discriminatory as the tax charges Chicago residents a 9 percent city tax on online games and streamed content but no tax is due to those who purchase similar content on physical media.