This seems… sketchy.
Chicago doesn’t have a municipal internet service I don’t believe… so I’m finding it hard to understand how they can justify adding a 9% tax to all streaming services. Basically seems to cover things like netflix, amazon… and it also mentions playing video games online.
I assume that includes buying DLC for games? What about in-app purchases on your phone? Suppose you’re not in the city when you buy 200 gems for Games of War or whatever?
No one time purchases are taxed, according to the article. I dunno. I have no idea how Chicago gets away with having taxes on “amusement”, but it does seem like if they have it at all it’s fair to extend it to online businesses as well.
This is interesting. It makes no logical sense to me, but I guess that taxes are not required to in the first place. Any opinions from the legal types around here?
That’s weird. So a recurring monthly subscription to WoW would get taxed (since it’s like a Netflix sub) but if you want to buy $500 worth of in-game cosmetic items, that’s okay?
“The privilege of watching/enjoying” seems to be the operative language here. The Tribune story seems to call out digitally purchased goods, aka Steam games and iTunes movies, as not subject to the tax.
It just seems weird that the government is taxing you for “the privilege of enjoying” something which the Chicago government has essentially nothing at all to do with providing to you.
This is a tax that seems pretty easy to evade as well. Guess we’ll be seeing lots of Chicago folks with non-Chicago online addresses soon.
““A lot of these online companies, their whole business model seems to be to get around the tax code, and to me that’s no business model at all,” Pawar said.”
I suppose you could switch large corporations for online companies and be pretty much be right again.
Seems like a pretty easy thing to avoid.
Seems more a band-aid fix for a larger issue, Chicago’s “yawning budget hole”.
Yep, just seems like a money grab instead of an effort to offset associated costs (although perhaps there’s a drop in workforce production the day after a new season of some popular show appears on Netflix). According to this list, Chicago has about 30 taxes (including sales and income tax, which don’t appear on that list). Some things that are not taxed by Chicago: medical services, hair cuts, pension income, non-beverage groceries, and numerous other transfers of wealth for goods and services. Not saying they should be, but why pick something that doesn’t produce pollution, waste, take up valuable space, nor apply wear to the infrastructure to tax? Apparently, just because it’s a revenue stream.
Those are the industries with employers / owners / employees who may actually reside in the municipality and may actually vote for you.
I think you’re confused about what taxes are. Taxes don’t have anything to do with whether the government is involved in providing that thing to you. If you’re being charged for a service, that’s called a “fee”. Taxes are the government saying “you’re doing this within our jurisdiction and we need money to operate and/or want to discourage this type of behavior without actively forbidding you to do it, so we’re taking a cut”. I have no idea why Chicago’s city government decided to tax this particular category of thing (and I would certainly resent it if I lived there) but it’s the sort of thing they can do.
Ding! Ding! Ding! You are the winner! Chicago cannot reign in its spending, so why not try to “fix” the income side?
IMHO, this will cause a lot of companies to think twice before opening/relocating in the city. There are numerous suburbs that are more business-friendly.
Oh, make no mistake, i realize that it is within their power to do so.
I’m just questioning the way they have chosen to describe it, as being a tax on the privilege of enjoying something that the government has no part in providing. It’s like taxing the enjoyment of sunshine or something.
Ultimately, i suspect it will fail to achieve the desired revenue increases, and just push people to avoid the tax.
Tell me more…
I’m just questioning the way they have chosen to describe it, as being a tax on the privilege of enjoying something that the government has no part in providing. It’s like taxing the enjoyment of sunshine or something.
Isn’t the “privilege” language there to delimit the scope of the tax more than anything else - so it captures PS Plus but not PSN games, for instance.