Chicago suburb approves tax on streaming services

Wheeling, a Chicago suburb, has recently joined the ranks of communities like Chicago and Evanston in approving a new tax on streaming services such as Netflix and Hulu. Starting January 1, the village will implement a 4% tax on these streaming platforms to offset revenue losses from other entertainment taxes.

This move is estimated to generate over $350,000 in additional revenue for Wheeling. The village decided to introduce this tax to make up for declining revenues from the telecommunications levy, which has seen a drop in profits as more customers switch from landlines to mobile phones. According to a memo from the village, revenues have decreased by $1.6 million between 2008 and 2024.

Furthermore, the village has experienced a decline in cable franchise fees as residents opt for streaming services over traditional cable packages. Despite the ongoing maintenance of public right-of-way for cable lines and repeater stations, Wheeling needs to recoup the revenue lost from these sources.

Households using streaming services can expect to pay around $19-30 annually in taxes, resulting in an estimated $350,000 in revenue for the community. The tax will apply to services like Hulu, Netflix, and Spotify, with enforcement beginning on January 1, 2026.

Wheeling’s decision to implement a streaming tax follows in the footsteps of other suburban communities like Arlington Heights, which approved a 5% tax on streaming services to enhance paramedic services within the community. The city of Chicago and the suburb of Evanston also assess taxes on streaming services.

In summary, Wheeling’s new tax on streaming services aims to address revenue losses from declining telecommunications and cable franchise fees, offering a solution to maintain essential services and infrastructure within the community.