Anyone who subscribes to a streaming service in Arlington Heights will be subject to a new local tax, village board members decided Monday night.
AP
Arlington Heights will levy a new streaming tax, and keep an old grocery tax, village board members decided Monday.
The new 5% tax on streaming entertainment subscriptions purchased by homeowners — approved by a 7-2 vote — will help pay the personnel costs of six new paramedics who will staff a fifth fire department ambulance.
The 1% local grocery tax is due to expire statewide at the end of the year, unless municipalities vote by Oct. 1 to retain it. That vote Monday night in Arlington Heights was slightly closer: 6-3.
Village officials said without the two taxes, they might have been forced to raise the property tax levy 8.25%.
For a resident who subscribes to all of the popular streaming services with commercials — including Netflix, Prime Video, Disney Plus, Peacock, Hulu and YouTube TV — the new tax will cost $41 a year. Without commercials, the tax is $61, according to a village estimate.
Supporters say the tax will help replace cable franchise fees and telecommunications taxes that have been declining due to cord cutting.
“I look at both of these taxes as taxes that are being retained because they’re just being packaged differently,” said Trustee Jim Bertucci. “(The streaming tax) is just shifting from one technology to another newer technology.”
Trustee Bill Manganaro, who voted against both taxes, suggested the village dip into its reserve fund, amid the financial pressures residents face from the higher price of groceries, electricity, insurance and other costs.
Streaming taxes are in place in Bloomington, Chicago, East Dundee and Evanston, but are not yet common across the region.
The new tax could show up on Arlington Heights residents’ streaming service bills early next year.
Officials expect to collect $480,000 a year, helping cover a portion of the expected $1.12 million ambulance staffing costs. They also plan to recapture $175,000 in ambulance fees from reduced mutual aid provided by neighboring towns.
But officials also have left open the door to a modest property tax levy increase next year to fully fund the new ambulance, which they argue is needed due to increased call volumes. For now, the new ambulance that hit the streets this year is being staffed by existing fire department personnel on overtime.
Meanwhile, keeping the grocery tax will preserve $1.3 million a year for village coffers, thereby avoiding service reductions and large property tax hikes, supporters contend.
But opponents argued the village should have considered other revenue sources to fill the gap.
“It’s a bad tax, and tonight is our opportunity to eliminate a tax that hurts the most vulnerable people in our community,” said Trustee Wendy Dunnington, who suggested the village raise its overall home rule sales tax instead.
About 370 of the nearly 1,300 municipalities in Illinois have opted to keep the grocery tax in place.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
