Spotify’s current premium streaming plan charges a reasonable $9.99/month, but with the arrival of a new tax, Chicagoans may have to prepare to shell out a few extra dollars for their monthly subscriptions.
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The tax will take effect in September.
The biggest controversy surrounding the passage of the update (aside from citizens not wanting to pay more taxes) is whether the city was in the right for expanding the old law, or whether new legislature should have been created for digital content. Entertainment website The Verge reported Wednesday that Netflix has already began making arrangements to add the tax to the cost charged to its Chicago customers.
Elizabeth Langsdorf, a spokeswoman for the city, said that this ruling is consistent with the current tax law and it is 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.
“We’re definitely opposed to a 9 percent additional tax and this kind of just goes back to what we’ve been seeing recently with the ongoing pension crisis”.
The city’s Department of Financing has ruled that these “electronically delivered amusements” are covered by the city’s existing amusement tax and personal property lease tax.
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The interesting part of this new sales tax regime is online gaming. Hotels, parking, concessions at sports events, restaurants, bowling alleys, movies – all of these and more “amusement” taxes have increased dramatically in recent years. A corporate law firm, Reed Smith, said this was just an attempt to tax the cloud more directly, as well as more comprehensibly than any other jurisdiction in the United States.
