Chicago’s Exciting Xbox / Cloud Computing tax!

Well, it’s going to be exciting to everybody who lives outside of Chicago.

As of July 1, 2015, citizens of Chicago who enjoy their Netflix, Spotify, Pandora, Amazon Prime, Xbox Live, and/or PlayStation Network subscriptions are now subject to the city’s 9 percent “Amusement Tax” for the privilege. Further, should you decide to digitally rent a movie or videogame via these services, the 9 percent tax would be applied for every rental. In other words, Chicago now taxes its citizens 9 percent on their $99 annual Amazon Prime subscription because of its instant video/music service, plus 9 percent for each $3.99 digital rental through the same service. The same applies for rentals and music services offered directly from Microsoft and Sony. Fans of Sony’s PlayStation Network ecosystem are hit hardest: a 9 percent tax each on their PlayStation Plus subscription, PlayStation Music, PlayStation Now (videogame streaming), and Sony’s recently introduced PlayStation Vue live-TV service. Throw in other rental/subscription services such as Hulu, Gamefly, Google Play, HBO Go, iTunes, and Vudu, and you get a sense of the sheer breadth of this tax on Chicago consumers’ digital lives.

So, basically, avoid living in Chicago if you enjoy living in the 21st Century. Or working in it, because they’re also going to tax the cloud. That’s why everybody outside of Chicago is excited about this. It’s not every day that a major city decides to deliberately drive non-geographically fixed companies out to the suburbs.

18 thoughts on “Chicago’s Exciting Xbox / Cloud Computing tax!”

  1. Question I didn’t see answered in the articles: How is the money getting collected? I mean, is Chicago trying to get Amazon, et al. to collect sales tax for Chicago residents? Or are they going to dun the residents and businesses of Chicago for the money? If the former, how are they going to deal with any company that has no point of presence in Chicago and tells them to pound sand? If the latter, how are they going to know how much to charge? How many people are going to treat this tax with the same contempt they apply to use taxes?

    1. That’s so cute, how they think the citizens are going to line up and pay their mandatory bonus tax.

    2. I’m guessing that they know they can’t collect it. Perhaps it’s just part of the movement of making everyone a lawbreaker. That way, they can send the swat team anywhere they want, since you haven’t paid your netflix tax.

    3. Actually, I followed the link, and skimmed through the description.
      The onus is on the provider to pay the tax. Thus, I’m sure the folks a Spotify, Netflix, Microsoft, etc., are busily coding so that they can *identify* which of their customers are within the city limits of Chicago. So that they can collect the tax, of course. Of course, perhaps they’re determining which customers they send the “Service Discontinued” letters to.

      1. It’s probably sort of like a use tax on hotel rooms. It’s just added to the bill that you pay to the provider who then passes that amount on to the city.

        1. That’d have to be based on the billing address, which – as thousands of Chicagoland small business owners have already shown – is very easy to change to the lake house in Wisconsin or Michigan.

          1. Neither Spotify nor Netflix have my billing addresses. They have a credit card number. There’s an address for the credit card, but I’m not sure that merchants can use this(?)

          2. Not sure if any other locality that charges an “Amusement Tax” (and this certainly is amusing… at least to me) and has tried to push it on Netflix et al.
            Given how badly DeBlasio’s anti-UBER campaign has gone, I .. suspect .. we’ll see Rahm Emanuel dealing with declining popularity among those who have the disposable income to donate to primary campaigns …

          3. But to levy that tax against Netflix, Amazon, et al. they must establish jurisdiction.

  2. “It’s not every day that a major city decides to deliberately drive non-geographically fixed companies out to the suburbs.”

    Actually, according to the list at the end of the article, it almost _is_ every day Chicago does just that kind of thing.

    Chicago was one of the cities that was going to prevent Wal-Mart from opening in the city proper, too, although I don’t know how that eventually went.

    1. Far as I know, they’ve still managed to prevent a WalMart in the city proper.
      Funny thing about Chicago .. it’s creeping closer and closer to tipping the traditional “city/bedroom-suburb” relationship….
      Live in the city, work in the suburbs …

      1. People with money and jobs are leaving Chicago!
        This is known as “bad luck.”

  3. I tried googling “walmart in chicago” to see if I could find stories; instead I got store locator links to 3 stores that apparently _are_ located in the city. That’s as far as I bothered to check.

  4. Keep going Chicago! Every time you add a tax, we get more businesses to move to Indiana. 🙂

  5. How in God’s name do they think they are going to monitor such use. No one will honestly self report.

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