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Chicago's new 'cloud tax' raises some questions about the future of streaming services

By dkpope
Jul 1, 2015
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  1. chicago netflix streaming service cloud tax online database online tax

    A new "cloud tax" takes effect today in Chicago, according to The Verge, and streaming services as well as online databases sit in the crosshairs. The tax is a combination of two recent rulings from the Department of Finance: the first covers "electonically delivered amusements" such Netflix and Spotify, and the second covers "nonpossessory computer leases" like Amazon Web Services or Lexis Nexis.

    Each ruling takes an existing tax law and configures it to levy another 9 percent tax on some online services. What does this mean in dollars and cents? With the new law, $100 of server time in Joliet would cost an extra nine dollars if you're in Chicago.

    This flies in the face of the logic of cloud services and sounds like it was implemented by people who don't like or don't understand the internet. Simply put, cloud services are meant to be universal and they can't be if certain towns tax them.

    Taking another angle, though, the reason this tax came to be is that Chicago is missing all the money that taxing businesses like Blockbuster used to produce. Once everything went to the cloud and brick and mortar businesses closed, the city lost money.

    Although we've all grown used to binge-watching Netflix and turning to Spotify for our tunes, we still stand at the beginning of our cultural relationship with cloud based services. This development in Chicago can't be shocking, but has some troubling implications. Will other cities jump on board? Will companies who might be impacted by similar taxes move their servers to un-taxed states? There's a lot that's still unknown.

    Image credit: Shutterstock

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  2. VitalyT

    VitalyT Russ-Puss Posts: 3,156   +1,431

    What a brilliant idea, sounds like there's a new Al Capone in town...
     
    NeurotechHD likes this.
  3. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,559   +2,900

    What generation is that now "Al Capone > the 73rd"?
     
  4. The city of liberals wants to tax Netflix? Holy hell who would have thought of it.
    Democrats. Gotta love em.
     
    NeurotechHD likes this.
  5. The City is failing so it's thinking of any other possible ways of getting $$$$.
     
  6. Evernessince

    Evernessince TS Evangelist Posts: 1,202   +596

    It seems they know how to attract business. Next they can implement another un-enforceable law on ads viewed online by residents of the city. Don't forget to tax all the people using VPNs from the city too!
     
  7. davislane1

    davislane1 TS Evangelist Posts: 3,565   +2,373

    I'm waiting on the 15% luxury hardware tax for PC users with rigs exceeding the average specs of an e-machine.
     
    NeurotechHD likes this.
  8. Kevin Ray

    Kevin Ray TS Rookie

    One blow after another for the people who are inclined towards online entertainment! I think that VPNs are the only solution right now to avoid these harsh taxation policies. I just fear that day when Governments would impose full-proof restrictions on VPN providers. Well, till then I am going to stick to Ivacy VPN. God bless all the netizens!
     
  9. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,754   +1,107

    Taxing the internet has been in the crosshairs for a long time.

    They've also talked about getting rid of the mortgage deduction (since only 'rich' people own homes), and taxing driving (since they've lost money on gas tax due to fuel efficiency).
     
  10. Hexic

    Hexic TS Addict Posts: 284   +132

    Lol, no one should be surprised - this is [corrupt] Chicago politics we're talking about.

    Makes no sense, drives business away, and pisses off the general populace. There's a reason why Illinois is experiencing the greatest population drop of all time right now.
     
  11. NeurotechHD

    NeurotechHD TS Rookie Posts: 61   +19

    All these Democrat-run cities are going bankrupt. Don't worry, though - the federal government will bail them out with money from the other states. And the redistribution of wealth continues...
     
  12. The good ole U.S of A, land of the free and home of the robbing barStewards.
     
  13. The Chad

    The Chad TS Enthusiast Posts: 23   +7

    And with the FCC passing their net "neutrality" regulations its only gonna get worse. The FCC has already proposed taxes to pay for net neutrality(regulation). So everyone thinking the FFC's decision to regulate the internet was some kind of win pretty much an *****. Fitting it all starts in Obama's "home" town
     
  14. S_Brideau

    S_Brideau TS Rookie Posts: 65

    Apparently Techspot only looks in the US. Here in Quebec they added a provincial law that makes us pay taxes for streaming. Got a message last week from Spotify that they had to add taxes to their price and that it would start in August.

    Seems they all go against logic and they want to keep the dinosaurs rolling without them adapting to the changing world. If only they'd understand how the digital world works they'd make their stuff available (music labels and movie producers). There's already less piracy because of the current streaming services already making a lot of stuff much more available.
     
  15. Now Streaming: "REM - It's the end of the world as we know it"

    There is no way back from this spiraling out of control greed infested capitalistic society. The End is Nigh.

    Seriously tho, I don't get how these supposedly smart, educated muppets, can keep making rules for their pockets, bad decision after bad decision. I think they realize the world is not worth saving so they are getting as much out of it as they can, at the cost of everyone else.
     
  16. At first I thought this was a bill attacking Online only, but the thing about this is that the Cable companies were already being taxed, you see it on your bill. While I'm not a fan of cable companies, it was an unfair advantage online services had over the cable companies.
     
  17. hrowder

    hrowder TS Enthusiast Posts: 56   +10

    Uhhmm... Cable companies (IP's) being taxed should cover all services you can get through them, including "online services". You cannot get online services (content) without an IP. The IP's pay taxes. Thus you should not be taxed twice for the IP AND individual or specific content.
     
  18. Tax tax tax...it's all governments know these days...these damn liberal socialists haven't seen or read about anything they cant get their sticky little tax fingers into...I'm surprised the greedy crooks haven't started taxing sunshine yet...they already tax rain runoff...

    it would serve them right if all companies stop service to the Chicago area in protest...even better is if customers revolt and cancel any service the tax would apply to
     


  19. Chicago is governed by probably the most left wing and most corrupt Democrat Party kleptocracy in the United States and yet somehow you blame capitalism?


    It might be interesting to do a brain scan to try to determine how your mind works.
     

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