Netflix hit with 'cloud tax' as Chicago targets online consumers

fortune ^ | july 1, 2015 | jeff john roberts

[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.”

[Chickensoup]

I gravitate towards HULU. I do like them both though.

____________

Hulu is nice but I am about ad-free.

I stopped the mailing service but I can see accessing their remarkable mail only database soon. It is a little expensive for HD movies but worth it.

[catnipman]

“If local video rental stores have to pay this tax, it is reasonable for Netflix to have to pay it as well. Otherwise, this is simply discrimination amongst various types of businesses.”

following that logic, then all merchandise and services purchased on the internet should be taxed at the same rate as the jurisdiction that the merchandise or service is delivered to. However, FYI, the Supreme Court has ruled it is illegal to collect such taxes for out of state businesses unless they have some kind of physical business presence in the taxing state.

[Chickensoup]

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.

_____________

Government jackals want some more of that!

[DoughtyOne]

Yes I saved about $170 dollars a month doing the same thing.

I have a television that connects wirelessly and streams these services. It’s great. (3D too) Love it.

My ipads and iphone do great over wifi.

I purchase movies on iTunes too, so I have my own data bank of movies as well.

I don’t hold anything in my hands any longer. It got to be so apace consuming to do so.

[DoughtyOne]

The adds don’t bother me much, having watched regular television for decades.

I do like Netflix too though.

I know what you mean.

[Chickensoup]

That is the difference, I went from 25 years of no television just a video occasionally to Netflix. Everything else was annoying.

[DoughtyOne]

Oh that make sense.

I don’t have a problem with people purchasing air time so I can watch a video.

As long as the commercials aren’t insulting, I can take it.

All also mention on that drives me nuts. It’s the home away from home add on HULU, and it’s a cut video. After seeing it what seems like 7500 times, I’m ready to strangle the girl an the dog. LOL

Not really, but it has gotten very annoying.

[Graybeard58]

If they levy a tax on each program I watch, I won’t be watching any programs.

What a moronic load of...

***********************************************************************

I see by your flag that you’re in California, well, I just want you to know that I’m in Illinois and we’re nipping at your heels in this race to see which state will be the most moronic.

[Kozak]

Virtual Private network.
With a VPN you can change your location.
For example, I’m living overseas, but as far as Netflix and HBO are concerned I’m located in the DC area.....

[Chickensoup]

HOw do you buy one of those?

[Kozak]

All kinds of companies provide the service.
I use Strong VPN.
www.strongvpn.com

[DoughtyOne]

You have my sympathy for that, to be sure.

[ronnietherocket3]

They still have those? Goodness that is sad. I can’t imagine people still use those businesses. Everyone is streaming now.

There are a couple within a 15 minute drive of me (a DC suburb). One of them is inside a city that recently won a Google eCity award.

[ronnietherocket3]

Nowhere in your post did you make an actual counter-argument. All you did was pile insults upon insults.

You are either young and naive or you are a vile leftist troll. I think the latter is more likely.

A common tactic of the homofascist lobby is to assume that anyone that disagrees with them is evil.

Again you truly need to study up tyranny -- it is enveloping us all.

And here you are telling me to go away because I disagree with you. You want me to stand up to tyranny while just assuming that whatever comes out of your mouth is true.

We are way way beyond "tax fairness" or whatever leftist egalitarian crap you want to throw against the wall.

Have you ever heard of a flat tax? It is popular on the right and is tax fairness.

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.

Yes, my generation and our progeny have to deal with the crap previous generations dumped on us:

• Social Security's nonexistent trust fund.
• Civil Asset forfeiture introduced by Reagan
• A military more concerned with appeasing various political groups than in achieving victory
• A War on drugs that has neither ended nor gotten rid of drugs.

[tumblindice]

“streaming tax”: women and children hit hardest

There must be a way to slice another sliver off Charlie the Man’s pie so others can have more.

[ronnietherocket3]

following that logic, then all merchandise and services purchased on the internet should be taxed at the same rate as the jurisdiction that the merchandise or service is delivered to.

I agree with that. The only issue is that there are a very large number of jurisdictions that can impose a tax.

[sand88]

Nowhere in your post did you make an actual counter-argument. All you did was pile insults upon insults.

no counter argument needed for such inane drivel. You posts are similar to so many leftists I have read of the years.

[sand88]

Yes, my generation and our progeny have to deal with the crap previous generations dumped on us:

It is sad because the vast majority of your brainwashed generation are enthusiastically embracing socialism and the goals of the evil left. You will all reap misery because you have been programmed to be leftists -- even those who think they are true libertarians.

The vast majority of the younger generation have an irrational hatred of capitalism and the concept of Liberty. In the end you will get the government you deserve.

Now, go take solace at the DUmp.

[ronnietherocket3]

It is sad because the vast majority of your brainwashed generation are enthusiastically embracing socialism and the goals of the evil left.

First off, who did the brainwashing? My generation did not brainwash itself.

The vast majority of the younger generation have an irrational hatred of capitalism and the concept of Liberty.

And here you are insulting someone who disagrees with you.

In the end you will get the government you deserve.

No, we get the government dumped on us by the previous generations who did not see someone's house not worth stealing (Civil Asset Forfeiture), someone's speech not worth suppressing (flag burning laws), or someone not worth mining for a comfortable retirement (Social Security).

[sand88]

No, we get the government dumped on us by the previous generations who did not see someone's house not worth stealing (Civil Asset Forfeiture), someone's speech not worth suppressing (flag burning laws), or someone not worth mining for a comfortable retirement (Social Security).

Most in your generation supports an all powerful central government. I don't care that it was dumped on you.

You and the rest of your pathetic generation has to make a decision -- do you want Liberty or do you want to embrace the wonderful idealist lies of the left.

If you want Liberty you will have to convince your generation to fight for it. If not then you all deserve the sadistic tyranny that will envelope you.

I fear your generation's hatred of Liberty and Capitalism will be the nail in the coffin of your future prosperity. So be it.