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Chicago Introduces Netflix Tax for Some Reason

Chicago Introduces Netflix Tax for Some Reason: Netflix

Netflix

Having run out of other ideas, Chicago is expanding an existing “entertainment tax” to include streaming services like Netflix and Spotify.

The Chicago Sun Times reports:

Chicagoans will soon be hit with a “cloud tax” for digital entertainment services — that’s 9 percent added onto streaming services such as Netflix and Spotify.

The city enacted the change in the amusement tax on Wednesday but won’t begin collecting until Sept. 1 in order to allow the affected businesses time to make changes.

Chicagoans have long suffered under this entertainment tax, which adds a surcharge to everything from dining out to attending a movie. The Verge breaks down the recently passed tweaks to existing tax code that make all of this feasible:

Chicago’s new tax is actually composed of two recent rulings made by the city’s Department of Finance: one covering “electronically delivered amusements” and another covering “nonpossessory computer leases.” Each one takes an existing tax law and extends it to levy an extra 9 percent tax on certain types of online services. The first ruling presumably covers streaming media services like Netflix and Spotify, while the second would cover remote database or computing platforms like Amazon Web Services or Lexis Nexis. Under the new law, what passes as $100 of server time in Springfield would cost $109 if you’re conducting it from an office in Chicago.

For now, Netflix plans to add that 9% fee directly to the bill of consumers in the Chicago area, and it’s assumed that other services like Hulu and Spotify will follow suit. Chicagoans are notably upset, and why wouldn’t they be? It just got 9% more expensive to watch Ruby Rose in action.

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