Taking money from the cloud
The world is rapidly changing, no doubt about it. Gone are most video rental stores, like Blockbuster and Hollywood Video, replaced in large part by streaming options like Netflix and Hulu. There's a lot you can do in the cloud these days, and if you live in Chicago, get ready to pay a 9 percent for the privilege.
Chicago's new so-called cloud tax goes into effect today. According to The Verge, the new tax is the recent of two recent rulings by the city's Department of Finance. One of the rulings covered "electronically delivered amusements" and the other was for "nonpossessory computer leases." Both are extensions of existing laws that add an extra 9 percent tax on certain online services.
Electronically delivered amusements would seem to cover streaming movie and music services -- Netflix, Spotify, and so forth -- while the second could be applied to remote computing offerings. While the details still aren't clear, it seems the law could apply to Amazon Web Services and the like. Depending on how broadly the tax law is enforced and how loose the wording, it's not inconceivable to see this being extended to services like Office 365 and OneDrive.
These are consumer taxes, though some companies are gearing up to collect the cloud tax as part of its monthly bill. What that will boil down to is a higher cost for certain services for people who reside in Chicago.
This is Chicago's way of reclaiming tax dollars that local businesses have lost to online services. Be that as it may, this is an issue that will likely end up in court.
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