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The city of Chicago will be placing a 9% tax on subscriptions to streaming services. This tax will effect plans with companies such as Spotify and Netflix, and was approved on Wednesday of this week. As the Chicago Sun Times reports, mayoral spokeswoman Elizabeth Langsdorf made a statement regarding Chicago’s latest “cloud tax:”
“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.”
Chicago believes this new “amusement tax” will generate $12 million a year in revenue for the city, and the city will stand as the “first major city” in the US to employ a tax on “all digital services.”