In 2015, I covered quiet changes to interpretation of local tax laws that affected individual consumers and businesses alike. The series started with an A1 article explaining the so-called ‘cloud tax,’ and continued documenting reaction and subsequent changes to the rules throughout the year.
Chicagoans who pay to stream movies and music from services like Netflix and Spotify will now need to fork over an additional 9 percent for the privilege, as will Chicago businesses that pay to use everything from real estate to court databases online, under a decision the city quietly made recently to expand its taxing power.
The added costs are the result of a ruling by the city Finance Department that extends the reach of ordinances governing two types of taxes — the city amusement tax and the city personal property lease transaction tax — to cover many products streamed to businesses and residents alike.
Chicago’s new 9 percent tax on streaming and cloud services appears to have the local technology community agitated and, more than anything, confused.
Reports on Wednesday of the “cloud tax” took many Chicagoans by surprise, leaving providers and consumers of streaming and cloud services scrambling to understand the implications. Technology companies, among the heaviest users of cloud services, are likely to be taxed for the services they use as well as those they provide.
July 8, 2015 Chicago may exempt startups from ‘cloud tax’ →
Confusion is driving widespread anger over last week’s quiet enactment of a “cloud tax” in Chicago, said Harper Reed , technologist and CEO of mobile commerce startup Modest.
“We need clarity on what it actually means, what it actually means for all of us,” Reed said. “What, as businesses, we can expect?”
I joined Bill and Wendy on WGN Radio 720 to discuss the ‘cloud tax’ and take listener questions.
The start date for the business end of the so-called ‘cloud tax’ that drew ire from Chicagoans and tech companies last month is being pushed back to Jan. 1, the city said Friday.
Businesses were to be on the hook for collecting 9 percent taxes on streaming and cloud-based services starting Sept. 1, according to new interpretations of the long-standing Amusement Tax and Personal Property Lease Transaction Tax.
September 18, 2015 Emanuel proposes changes to controversial ‘cloud tax’ →
Mayor Rahm Emanuel’s 2016 budget proposal will walk back portions of the controversial ‘cloud tax’ that drew the ire of Chicago’s tech community when it was introduced in July.
On Friday, he released a list of proposed changes — including lowering the rate of the lease tax and exempting small, early-stage startups — that he will present to the City Council at Tuesday’s budget hearing.
October 16, 2015 Emanuel details changes to business side of ‘cloud tax’ →
Mayor Rahm Emanuel has revealed details of his plan to blunt the impact of the controversial “cloud tax” on the tech community.
A new revenue ordinance provided to the City Council on Wednesday offers greater detail about how Emanuel would cut the rate of the tax on some services and exempt some startups from paying it.
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