Chicago imposes 9% cloud tax on Spotify and other streaming services
Come September, Chicago residents will be forced to pay a 9 percent “cloud tax” if they use digital streaming services like Spotify and Netflix. The new tax will serve as an extension to the city’s amusement tax, which taxes entertainment industries across the spectrum – reeling in about $12 million per year.
The city, which voted on the change on Wednesday, believes that the tax will “allow for a more uniform way to apply taxes on digital services.”
For now, only those with a residential or primary business street address in Chicago will be susceptible to the tax, which will also include cloud computing and financial products. This is the first major city to impose a tax on all digital services.
Mayoral spokeswoman Elizabeth Langsdorth commented, “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. These two rulings are consistent with the city’s current tax laws and are not an expansion of the laws. These ensure that city taxation is uniformly and fairly applied and that businesses are given clear guidance on the applicability of the city’s tax laws to their operations, and they clarify that the amusement tax and personal property lease tax apply to digital services.”
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.
Via: Chicago Sun Times