News and Insights

City of Chicago Offers New Amusement Tax Voluntary Disclosure Program

Tax Development Nov 04, 2016

The City of Chicago announced a new voluntary disclosure program with respect to the 9% amusement tax. This voluntary disclosure program is targeted for businesses that subscribe to and use paid television programming services, including satellite television services. These businesses include bars, restaurants, and any other businesses that subscribe to satellite television services. The city stated that the reason for offering the program is because many businesses were unaware of their obligation to pay the amusement tax.

Satellite television providers are exempt from collecting any local taxes as a result of the Federal Communications Act; however, it is the city’s position that the Act does not prohibit the city from collecting the amusement tax from satellite television customers. Businesses that have not paid the amusement tax must file for the voluntary disclosure program by December 31, 2016. The program requires that businesses pay all taxes from July 1, 2015 through the date of payment while waiving all penalties and interest. Moreover, all Amusement Tax liabilities, interest, and penalties would be waived for all liabilities prior to July 1, 2015.

The city has been expanding the definition of services subject to the amusement tax as noted by the issuance of Ruling Number 5 on June 9, 2015, which was effective July 1, 2015. The Ruling expanded the amusement tax to streaming entertainment services. A class-action lawsuit is proceeding in Cook County Circuit Court against the city with respect to this action.