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New Chicago 'cloud tax' makes streaming services more expensive

Written by
Clayton Guse

Subscriptions for services like Netflix and Spotify could become more expensive in Chicago due to a new "cloud tax" that went into effect on Wednesday. Two different rulings from the city's Department of Finance will impose an amusement tax on streaming services and “nonpossessory computer leases." 

The new tax rules are required to take effect before September 1 and will charge a nine percent tax on any shows, music or movies that are "temporarily downloaded" in Chicago via services such as Netflix and Spotify. The Verge reported that Netflix is already planning on passing that tax along to subscribers.

The city has seen a decline in tax revenues from brick-and-mortar stores over the past decade, and the new tax regulations are one way that Chicago is trying to compensate. Local governments around the country have been trying to find ways to tax online services. The cloud tax is one of Chicago's first attempts. 

It's unclear exactly how the tax will be imposed, but it is sure to affect the cost of binge watching Mad Men in Chicago. Personally, I use my girlfriend's friend's ex-boyfriend's Netflix login. He lives in New York, so I'm presumably immune from the cloud tax. 

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