The Windy City needs cash, and its citizens like to watch movies and develop web apps. Time to get on that gravy train.
A ruling by Chicago’s Department of Finance allows the city to add an extra nine percent tax onto “electronically delivered amusements” and “nonpossessory computer leases.”
In an odd combination, buying a subscription to streaming media, such as Netflix or Spotify, would qualify, as would using a cloud computing platform, such as Amazon Web Services. Each would be subject to 9% tax; Chicago is the first major American city to levy a tax on either streaming services or cloud computing services.
This isn’t an actual new tax, rather an expanded definition of the city’s already-existing nine percent amusement tax. The Chicago Sun-Times reports the tax will net an additional $12 million a year.
Cities with amusement taxes have lost revenue as more people forgo book stores, record shops and video rental stores in place of online outlets. But $12 million isn’t going to be much more than a drop of water in the bucket of the city’s $1 billion operating shortfall.
The tax is collected based on a person or business’s zip code, and the city is giving online services until September 1 to collect. So, Chicagoans: Enjoy your tax-free binging of Chopped while there’s still time.