Chicago Levies "Cloud Tax" on Spotify, Netflix, Other Streaming Services

Starting this September, users of streaming services such as Spotify and Netflix in Chicago will be subject to a 9 percent “cloud tax,” the Chicago Sun-Times reports. The city voted on Wednesday to extend its amusement tax, which taxes entertainment industries such as cinema and sports, to digital services, and expects the tax to bring in $12 million a year.

In a statement quoted by the Sun-Times, mayoral spokeswoman Elizabeth Langsdorf said: “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.”

Opponents argue that the city should have drafted new laws, rather than extending the old ones.

Head to the Chicago Sun-Times for the story.

Read “Station to Station”, our cover story on the history of streaming music.

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