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Apple has settled its lawsuit with Chicago over the city’s so-called “Netflix tax,” according to a report from The Hollywood Reporter. The tax placed a 9 percent levy on “electronically delivered entertainment” – essentially targeting streaming services.

The exact terms of the settlement were not made public. However, Bloomberg Tax last year reported that revenue from the tax – widely believed to be the first of its kind – grew to more than $30 million in the year ended June 30, 2021.

The decision has been a long time coming. Chicago introduced the new tax in 2015 as it tried to make up for lost revenue from traditional brick-and-mortar stores. Apple filed its challenge in 2018, and was one of many groups and companies that objected to the law. Others who raised legal challenges included Sony Interactive Entertainment, video game trade association the Entertainment Software Association (ESA), and an advocacy group representing Netflix, Hulu, and Spotify.

The number of objections facing the tax led to a delay in Apple’s lawsuit against the city. The case was shelved for more than two years while the challenge from users of the streaming services played out in the courts. But, over time, these other legal challenges were either decided on Chicago’s behalf (and not overturned on appeal), or settled, or dropped. Last week, a judge dismissed Apple’s amended complaint, which alleged that the tax is unconstitutional. Apple chose not to reflect again, according to The Hollywood Reporter.

Although revenue from the “Netflix tax” is only a small fraction of the city’s roughly $1.5 billion in tax revenue, Bloomberg Tax notes that revenue has roughly tripled over the past five years. The tax brought in $9.4 million in its first full year in 2017, rising to $28.8 million in 2020, and $31.2 million in 2021 from the 47 businesses registered under the rules. In contrast, many of the city’s other local business taxes were hit hard when the pandemic forced the closure of brick-and-mortar locations.

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