If you live in Chicago, you need to prepare yourself for a “cloud tax” that went into effect on July 1. No, it isn’t a tax on rainy days, but it is like a storm cloud hanging over you. A money-sucking storm cloud.
The nine-percent tax to cloud services like Netflix, Spotify and Xbox Live comes from an “amusement tax” ruling that says that items “delivered electronically” for entertainment purposes are subject to a tax that has traditionally been levied against the sale of things like concert tickets, sporting events etc.
It sucks, but at least this ruling does not affect the sales of movies, songs and games delivered electronically. There’s that at least. So purchases from places like the iTunes store and Steam are not taxed. However, a subscription to Apple Music or Spotify is subject to taxation.
If your streaming entertainment service hasn’t already started charging, you may have a few months before your bill goes up, but it will go up. The ruling gives companies until September 1, 2015 to comply. Yet another tax is the last thing anyone wants. Hopefully we don’t see this trending elsewhere outside of Chicago. We have enough taxes as it is. We don’t need more.