New Tax Rules Covering Gaming And Streaming Prompt Lawsuit From ESA

The Entertainment Software Association announced today that it has filed a lawsuit that takes issue with the city of Chicago's new tax rules that impact streaming services and games.

In a news release, the ESA said the new tax rules are "illegal and harmful." This all relates to the city's Amusement Tax program, which has been expanded to cover "participating in games online" at the price of 9 percent on streaming and subscription services. This pertains to subscriptions to online games and game libraries, the ESA said.

According to the ESA, Chicago is violating the Internet Tax Freedom act "by discriminating against online entertainment."

"The city's Amusement Tax hurts ordinary Chicagoans by forcing gamers to pay for their elected officials' budget mistakes, literally," the ESA said.

"This discriminatory tax makes Chicagoans' lives more expensive, just because they live in the 21st century and choose to play video games online," ESA CEO Michael D. Gallagher said 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. 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."

Americans for Tax Reform president Grover Norquist added: "This legal challenge will help Chicagoans fight back."

You can read the ESA's complete lawsuit here.

The ESA represents the video game industry's interests in Washington, D.C. and across the country. The group also organises E3 every year.