Chicago has a new plan to make up for lost amusement tax revenue: by bringing Spotify, Netflix, and other streaming services under the city's amusement tax laws. They simply changed the definition of an amusement.
"This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically," the new regulations say. It goes on to further define them as "charges paid for the privilege of watching electronically delivered television shows, movies or videos," "charges paid for the privilege of listening to electronically delivered music," and "charges paid for the privilege of participating in games, on-line or otherwise."
That last one also means that online game subscriptions, like a World of Warcraft account, are subject to a 9 percent city amusement tax. This is separate from any sales tax that might be collected for the services. If you rent a movie on Amazon, you incur the charge, but if you buy it outright, it doesn't count, as the regulations stipulate: "The amusement tax does not apply to sales of shows, movies, videos, music or games."
The new regulations go into effect in September. As The Verge also points out, it's part of a larger "cloud tax," in which the same amount is being collected for "nonpossessory computer leases"—which is to say, purchasing online web storage. This means your Dropbox, Amazon Cloud, or other services are affected by the tax. How this conflicts with, say, purchasing a movie on Amazon (which is exempt, as pointed out above) remains to be seen, as most Amazon purchases are stored virtually rather than locally.
Source: DSL Reports
