Wheeling to tax streaming TV, music and games

Wheeling residents who enjoy chilling out while watching Netflix, Hulu or other streaming services soon will have to shell out more for the privilege.

The village board on Monday approved a 4% tax on video or audio streaming services that’ll be effective Jan. 1. It also applies to online games available via rental or subscription models.

The tax will increase the cost of a $10 monthly subscription by 40 cents a month. For a typical Wheeling homeowner, that could amount to an additional $19 to $30 annually, Finance Director Brian Smith said in a memo.

Overall, the tax is expected to generate about $350,000 annually for the village. The money will go into the village’s general fund, Smith said.

The tax was suggested during the Nov. 1 budget workshop as a way to partially make up decreasing revenue from cable franchise fees, which are dropping as more people shift to streaming TV services, Smith wrote. The move away from land-based telephones to smartphones has decreased telecommunications tax revenue, too, he said.

The drop in telecommunications tax has been particularly significant, Smith said. In 2024, the village received $1.6 million less from that tax than it did in 2008, he wrote.

Streaming service providers will be responsible for collecting the tax and sending the money to the village. Wheeling will notify streaming companies of the tax and require them to register.

Streaming services or programs offered by nonprofit organizations, school districts or government agencies will be exempt.

The plan is part of an effort by village officials to focus on user taxes rather than property taxes that affect everyone, Village Manager Jon Sfondilis said in an email.

During a discussion before Monday’s unanimous vote, Smith called the proposed streaming tax “a lesser evil” than a property-tax increase that would hit all property owners.

Arlington Heights approved a 5% tax on streaming entertainment in August. It’s supposed to go into effect in early 2026. The money will help pay the salaries and related expenses of six new paramedics, officials have said.

Chicago, East Dundee and Evanston are among the other Illinois communities with streaming taxes on the books.

State officials this fall opted not to enact a statewide tax on streaming services as part of a transit funding bill.