Chicago officials have found a way to tax “the cloud.”
Digital media companies and Chicagoans will now be slapped with a 9 percent “cloud tax” on streaming services, the Chicago Sun Times reported Wednesday.
City officials aim to generate $12 million from the new tax. Collections will begin Sept. 1.
“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, the newspaper reported.
Companies are already working to shift costs imposed by the “cloud tax” onto consumers. Entertainment website The Verge reported Wednesday that Netflix has already began making arrangements to add the tax to the cost charged to its Chicago customers.
The Verge reported that the new taxes came about as a result of two rulings by Chicago’s Department of Finance. One ruling covers “electronically delivered amusements” and another “nonpossessory computer leases.”
“We’re definitely opposed to a 9 percent additional tax and this kind of just goes back to what we’ve been seeing recently with the ongoing pension crisis. The city is looking to expand the tax base in any way, even if that means pushing out more Chicagoans over time,” said Jared Labell of the Illinois nonprofit organization Taxpayers United of America, the Sun-Times reported.
• Douglas Ernst can be reached at dernst@washingtontimes.com.
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