Advanced Television: Chicago imposes streaming tax

“In an environment in which technologies and emerging industries evolve quickly, the City periodically issues rulings that clarify the application of existing laws to these technologies and industries”, mayoral spokeswoman Elizabeth Langsdorf said in a statement issued Wednesday.

Spotify’s current premium streaming plan charges a reasonable $9.99/month, but with the arrival of a new tax, Chicagoans may have to prepare to shell out a few extra dollars for their monthly subscriptions.

The biggest controversy surrounding the passage of the update (aside from citizens not wanting to pay more taxes) is whether the city was in the right for expanding the old law, or whether new legislature should have been created for digital content.

The tax actually brings Chicago’s approach to Netflix in line with other forms of entertainment. One ruling covers “electronically delivered amusements” and another “nonpossessory computer leases”. The ordinance says that in order to figure out if tax should be levied upon consumers, the city will use their billing address. The “cloud tax” will be 9 percent.

Chicago is grasping for any and all revenue to ease its fiscal woes, and its latest move is to tax Internet cloud services.

The city has seen a shrinking tax base for more than two decades, but it has accelerated recently as politicians have become more and more inventive in separating residents from their hard earned cash via local taxes. The tax is an extension of the Amusement Tax, which taxes entertainment industries such as sports and cinema.

If you live in Chicago, then you better complete all your recent Netflix binges by the end of summer, because starting September 1 Chicago will be applying a new tax to streaming services such as Netflix and Spotify.