Chicago Netflix, Spotify, and Amazon Web Services Users To Get Hit With Cloud Tax

July 2, 2015

4:03 pm

Are you living in Chicago and enjoying binge-watching the latest season of Orange Is The New Black or House of Cards on Netflix? If so, you may soon have to start paying more for your Netflix fix. The Chicago Tribune reports that streaming service providers need to start collecting a new tax starting September 1, 2015. The new 9 percent tax is expected to net the city of Chicago an additional $12 million annually. This tax is not just exclusive to Netflix but will also include any streaming service for music, movies or other amusing online content.

Being dubbed the ‘Cloud tax’ it is composed of two pieces based on recent rulings made by the city’s Department of Finance. The first ruling covers “electronically delivered amusements”, while the second covers “nonpossessory computer leases”; thus, the new Cloud tax takes an existing tax law and extends it to include online services – resulting in an additional 9 percent tax. The first ruling covers streaming media services like Netflix, Pandora, and Spotify. The second ruling covers remote database or computing platforms like Amazon Web Services. So, essentially, your $9.99 Netflix subscription might now cost you $10.88 and your $99 server in Evanston will now cost you $107.91 in Chicago.

Since the taxes will be based on Chicago billing addresses, some residents might start using a billing addresses in other towns or outside the city limits as a workaround. If not, the clock is ticking and you’ve got two months left to enjoy streaming your favorite programing – you had better get to it.

Photo Credit: Kelly DeLay

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Frank Gruber is the cofounder, CEO and Executive Editor of Tech.Co (formerly Tech Cocktail). He is the author of the book, Startup Mixology, Tech Cocktail’s Guide to Building, Growing, and Celebrating Startup Success. He is also a startup advisor and investor to startups.

Find Frank Gruber online and follow him on Twitter at @FrankGruber.

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