The City of Chicago is broadening the scope of two tax laws to make more money from your leisure activities. According to the Chicago Tribune, the city’s Department of Finance is expanding two existing recreation taxes to include digital music downloads and movie rentals within their remit.
As of September 1, 2015 Chicagoans will pay a 9% tax for streaming services. “The amusement tax applies to charges paid for the privilege to witness, view or participate in an amusement,” the city’s amended ruling reads. “This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically.”
This is a combined result of two pre-existing taxes - the city amusement tax and the city personal property lease transaction tax - being moderated to incorporate Cloud activity. Silver-lining is that you won’t get stung for pre-owned music and movies in iTunes. It’s streaming content that’s being targeted. Companies offering the services will present customers with a bill for those additional costs, netting a total of approximately $12 million a year for the city.
And if all goes without a hitch this “cloud tax” is expected to roll out nationwide. According to a Netflix spokesperson Chicago is the first city to score a piece of the lucrative streaming pie, paving the way for other authorities to attempt the same in the near future.
Before you click off elsewhere in a haze of despondency, let’s conclude on an uplifting note: record and video stores could make a comeback.
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