Posted on 07/01/2015 5:26:51 PM PDT by lowbridge
Chicago officials are taking an aggressive new tax approach. Consumers will now have to pay 9% on Netflix, Amazon Web Services and more.
Chicago is marking Independence Day this year with fireworks, hot dogs – and sweeping new tax rules that require companies to collect a 9% levy every time consumers use streaming and cloud services such as Netflix or Amazon Web Services.
The rules, which went into effect today, came about after city officials expanded the interpretation of existing amusement and property lease taxes to encompass cloud-based technologies.
According to lawyers at ReedSmith, which flagged the new rules in a blog post, the taxes now encompass SaaS (software as a service), PaaS (Platform as a Service) and streaming media services. In a phone interview, Wynne described how the tax collection will work in practice:
“It really comes from doing audits of consumers. Take our law firm. City officials will audit us for a bunch of taxes, and may find online services,” said Wynne, explaining that officials will now check if the firm has been paying the 9 percent tax on those services.
This raises the question of who is responsible for collecting and paying the tax, which is technically levied on consumers.
“Let’s say an audit of our firm reveals we an invoice from Amazon or someone else with a Chicago address,” said Wynne in a hypothetical example. “The city authority has the choice of either going after the law firm or the companies who didn’t collect.”
(Excerpt) Read more at fortune.com ...
Spoken like a true egalitarian.
I suggest you study up on tyranny. A mindset reflected in your naive and foolish comment is best suited for the Statist DUmpsters.
There are still a few bargains out there.
I agree. Love finding them. LOL
Streaming services are not rental services. They are a subscription service. This has nothing to do with rentals as rental stores pay only sales tax. Netflix and Amazon also pay the sales tax on the cost of their services.
Dear Lord....the stupid is strong in this one.
L
HBO has done it for years at a very profitable level.
Is it businesses or people in their homes. It doesn’t really say anything directly about people in their homes. If it is businesses, I think it would be really a very low amount collected overall and hardly worth doing. If it is customer, is it 9 percent on the 8 bucks or every time you turn it on? It is a VERY confusing law and I want to know what this means because it will be knocking on our doors very soon I am sure.
Normally when two businesses compete and a government policy gives one an advantage over the other, it is corporate welfare, e.g., Solyndra Loans. If a video rental store has to pay a certain tax, but Netflix does not, that becomes a form of corporate welfare. If you want to get rid of the tax, fine, if you want both to pay the tax, fine. But both must be taxed equally otherwise it is corporate welfare.
Jim I’m not sure exactly what it is they are doing. Do they have a connection at $7.99 per month that gives completely access?
If local video rental stores have to pay this tax,
They still have those? Goodness that is sad. I can’t imagine people still use those businesses. Everyone is streaming now.
Interesting. This isn't only going to affect consumer online streaming services, this has the potential to hit EVERY BUSINESS that uses any cloud based service such as ServiceNow, or Amazon.Com for encrypted storage in the cloud.
The business taxes from this are going to be staggering. Methinks the City of Chicago hasn't thought this one through. If they did, they'd see a high number of businesses moving OUT of Chicago because of this.
The organization I work for, this translates to MILLIONS of dollars for us.
You are either young and naive or you are a vile leftist troll. I think the latter is more likely.
Again you truly need to study up tyranny -- it is enveloping us all.
Arguments such as yours is ridiculous and meaningless. We are way way beyond "tax fairness" or whatever leftist egalitarian crap you want to throw against the wall.
Government at all levels is totally out of control and increasingly becoming more sadistic towards it's citizens and yet you argue that because Netflix isn't paying a tax it is corporate welfare? Go back to the DUmp you Statist lover.
What is VPN?
The 900 pound retarded troll that is gruberment...
I love Netflix, Just love them!
I gravitate towards HULU. I do like them both though.
Netflix has a couple stream only purchase points starting at $8 or 9 a month. I pay $12 and can watch on as many as five units at a time. I have a big family and no cable. For a few dollars more you can also get video CD’s delivered in the mail.
With the streaming service you can watch unlimited shows that are on Netflix. They have thousands of movies and television shows to chose from including several first rate original programs. They add and subtract programs and movies on a regular basis. There are no additional charges for offered content. There are no commercials. Everything is instantly streamed on demand.
They have about 55 million monthly subscribers at an average of around $10 a month. That is $550 million a month or around six billion a year in revenue. That gives them a great deal of revenue to provide services.
I also have HULU and Amazon Prime. Prime also offers free programs and movies, but they have additional movies that they charge fees to stream. I look at prime as a free two day delivery service as Amazon delivers free for prime members expedited two day service for around $8 month. That is a yearly payment of $100.
HULU Plus is a pay service that has mostly television programs that are airing right now. They have commercials which is annoying, but my kids like it.
I ditched cable about a year ago and said goodbye to around $110 a month and have not missed it one bit. Thanks to primarily Netflix.
Yes. Eventually it self-immolates. And we’re getting close to seeing that here. Cf Greece
I predict a future Netflix original documentary called “The Night Chicago Died — Financial Armageddon”.
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