Chicago Now Taxes Netflix And Other Cloud-Based Services

MrCaffeineX

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so....
isn't it illegal to tax interstate goods?

My understanding is that this is a gray area at best. For example, Amazon has to charge sales tax in states where it has a physical presence, regardless of where the item is being shipped from. Since I live in New York, I get charged tax by Amazon on my purchases, even if I'm receiving an item shipped from one of their warehouses in Tennessee. I don't think I get charged sales tax on the marketplace if the seller is outside of New York though.

I don't know if Netflix has a physical presence in Chicago, but assuming that they do, perhaps the precedent which allows New York to enforce sales tax with Amazon can be used to justify the new tax in Chicago? Alternatively, since the end-user's service address is within the city of Chicago, perhaps that is enough to provide them with the authority to tax the service being provided? If that ends up being the case, people that want to save a dollar a month on their Netflix subscription will just use a different address that is outside of Chicago, but I doubt that most people would care enough to go through the extra effort over a dollar a month and maybe that is what the Chicago politicians are counting on?
 

redrage

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Or they can not because they do not own anything between point A and point B that gets a resident his netflix fix

while that's true they could give breaks to companies to develop better infrastructure. New York State is doing this now to attract some business in.

but if you didn't see my earlier post they just had to take a large loan and layoff 1400 people to make a payment to the teachers pension and then turned around and asked the teachers pension people for a half billion dollar loan the next day. they cannot afford to do anything new
 

nutzo

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Yup, I think it all started with the mafia and the prohibition, then they went into gambling, then into unions, and finally just into government to run the show.

You forgot to add that they also went into the white house...... You don't think they spent 7+ trillion just to buy Obama phones.
 

MrCaffeineX

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while that's true they could give breaks to companies to develop better infrastructure. New York State is doing this now to attract some business in.

but if you didn't see my earlier post they just had to take a large loan and layoff 1400 people to make a payment to the teachers pension and then turned around and asked the teachers pension people for a half billion dollar loan the next day. they cannot afford to do anything new

This is actually a controversial policy here. Many established business owners are upset because they cannot qualify for the grant funds or tax incentives that a startup can, which could potentially lead to a startup pushing the prices for services lower because they can afford to charge less due to reduced overhead.

Personally, I think it speaks to larger problems with the tax system in New York in general if even the governor is admitting that taxes are too high for businesses to want to operate in New York. The implementation has been corrupt here as well, with some established businesses qualifying for tax breaks that are supposed to go to startups and some startups being denied, so I guess it really is just business as usual (read crony capitalism).
 

nutzo

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Yeah this is a Chicago going full retard thing, not a democrat thing.

I'd disagree, it is a democrat thing :)

Living in California I've had a front row seat as this state has gone from a 50/50 Republican/Democrat state to one where Democrats own every state wide office.
 
D

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It'd be hilarious if companies like Netflix just said "fuck you!" to anyone in Chicago so that the government could deal with the pissed off people, but that'll never happen.

This is probably why I'll never own a multi million dollar business because that's exactly what I would do.
 

kbrickley

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Prepaid reloadable visa card. Not linked to an address.



Dear Chicago,
Have a nice day.

I would assume that the taxes are based on your billing address with Netflix (my taxes for Netflix changed when I updated my address from Texas to New Mexico) ... if you can do this and have a service address in the Netflix system that isn't in Chicago then that would work. Just make sure the address you use doesn't also have Netflix taxes. Both Texas and New Mexico already tax Netflix.
 

Ur_Mom

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Internet tax, electricity tax, sales tax on the computer, Netflix tax, the content providers are paying a tax, income tax from the paycheck to pay the other taxes.... Everything is taxed throughout the whole chain of events. Hell, even when you pause it to take a shit, you're paying taxes for your shit to go down the drain.

Just another tax on top of the endless list of other taxes. I can see why the others are being taxes. Netflix? Not so much. It's like having to pay a tax to view [H] or more relevantly - YouTube. I don't understand it...
 

redrage

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This is actually a controversial policy here. Many established business owners are upset because they cannot qualify for the grant funds or tax incentives that a startup can, which could potentially lead to a startup pushing the prices for services lower because they can afford to charge less due to reduced overhead.

Personally, I think it speaks to larger problems with the tax system in New York in general if even the governor is admitting that taxes are too high for businesses to want to operate in New York. The implementation has been corrupt here as well, with some established businesses qualifying for tax breaks that are supposed to go to startups and some startups being denied, so I guess it really is just business as usual (read crony capitalism).

It was proposed by the President as well in the certain zones across the country that had highest unemployment or something (don't remember) don't know if it actually happened though.

Chicago's problem boils down to is that they spend more than they get in. I don't care who you are, what organisation or government you are.. you do it long enough it is going to bite you in the butt. Of course the people hurt the most by it are the everyday people and those who depend on that person/organisation/government to survive.

I work in NY and Live in PA. NY's mismanagement is evident the moment you cross the border. The roads are horrible :D
 

/usr/sbin

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I work in NY and Live in PA. NY's mismanagement is evident the moment you cross the border. The roads are horrible :D

To be fair I live in the peoples republic of socialist NY and I can tell you that our roads take a beating due to the ice, snow, and salt. All things being equal our roads wear out much quicker than roads in the south that don't experience our weather.
 

BettiePage

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need to figure a way to tax you if you drive on Chicago streets... gotta pay for maintenance and only effect the users/drivers...
 

MrWrong

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So is this an additional tax on Netflix then ... my Netflix monthly fees have always had tax added, when I lived in Texas and now that I live in New Mexico (the New Mexico rate is slightly lower so they charge a few pennies less tax) ... Is Chicago adding onto this existing tax for Chicago residents?

I have the same thing here in Wisconsin. I have been paying tax on my netflix subscription since I got it.
 

fuzzylogik

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isn't that the gas tax? which should be doing exactly that (and boy did they make a lot of cash in the last decade with high gas prices). though... i don't know if anybody actually can see any differences. or where the money actually went ;)
 

redrage

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To be fair I live in the peoples republic of socialist NY and I can tell you that our roads take a beating due to the ice, snow, and salt. All things being equal our roads wear out much quicker than roads in the south that don't experience our weather.

To be fair lol. I live less than a mile away from the NY border and its fairly nice to OMG! in less than 10 yards and I also live in the lake effect area. Oh yeah and PA generally takes better care of the snow and ice as well.
 

magoo

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I would assume that the taxes are based on your billing address with Netflix (my taxes for Netflix changed when I updated my address from Texas to New Mexico) ... if you can do this and have a service address in the Netflix system that isn't in Chicago then that would work. Just make sure the address you use doesn't also have Netflix taxes. Both Texas and New Mexico already tax Netflix.

So how are you taxed on Netflix?

If I review my CC statements, all I see is a flat charge for Netflix of 8 bucks a month.
No sales or other taxes to my recollection.

All I can say is good luck Chicago or it's citizens......it's going to cost Netflix or Amazon or whomever some serious money to filter out customers and then add 9% more on to their bill.

Again I say.....what the FUCK is the City of Chicago doing to make it acceptable for them to charge a tax on a use of a "service" that they do not provide, do not improve and do nothing to collect?

If I were Netflix or whomever I'd at least put up some resistance to the collection and make them do that to earn their money.
 

Despotes

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We're taxed for just being alive. Thank you Democrats. :mad: SCOTUS said Obamacare was a tax.
 

Kaitian

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isn't that the gas tax? which should be doing exactly that (and boy did they make a lot of cash in the last decade with high gas prices). though... i don't know if anybody actually can see any differences. or where the money actually went ;)

Taxes on gases is fixed price, not percentage based. Illinois is 52.48 cents per gallon. Other states like Pennsylvania is 70 cents per gallon, California 65.98 cents per gallon.
 

redrage

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Again I say.....what the FUCK is the City of Chicago doing to make it acceptable for them to charge a tax on a use of a "service" that they do not provide, do not improve and do nothing to collect?
It will buy the Mayor a nice steak dinner and help keep the teachers pension... a little.
 

redrage

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Taxes on gases is fixed price, not percentage based. Illinois is 52.48 cents per gallon. Other states like Pennsylvania is 70 cents per gallon, California 65.98 cents per gallon.

the federal tax is 18.4 cents. your quoting state + federal.
 

kbrickley

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So how are you taxed on Netflix?

If I review my CC statements, all I see is a flat charge for Netflix of 8 bucks a month.
No sales or other taxes to my recollection.

All I can say is good luck Chicago or it's citizens......it's going to cost Netflix or Amazon or whomever some serious money to filter out customers and then add 9% more on to their bill.

Again I say.....what the FUCK is the City of Chicago doing to make it acceptable for them to charge a tax on a use of a "service" that they do not provide, do not improve and do nothing to collect?

If I were Netflix or whomever I'd at least put up some resistance to the collection and make them do that to earn their money.

Netflix adds the tax to my bill which is then charged to my card ... my Netflix billing history shows the base cost ($7.99) + (0.63 tax) ... since I carry a blu ray plan I pay tax on that also ... I assume they then pay the tax to the State ... I was paying one tax rate on my Netflix while I lived in Texas ... once I moved to New Mexico last year and updated my billing address the tax rate changed (dropped a few pennies) ... this was all automatic as part of my Netflix billing
 

TwistedAegis

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Zarathustra[H];1041705763 said:
What is the rationale here? :confused:

Taxation at the municipal level is usually justified based on the cost you introduce to the locality.

For example, if you run a delivery company, you wear roads that need to be repaired. If you own a house you live there and as such should pay for the services the locality provides to residents...

How on earth do cloud services incur any additional cost on the city?

This is moronic.

This. It isn't even like the rationale used for taxing Amazon, which is that it is detrimental to local merchants who have to charge sales tax, thus allowing Amazon to undercut everyone.

Netflix and cloud services aren't being taxed like...local cloud services are? :confused: :rolleyes:

Every time someone says, "Tax the rich!", this is what happens so some need to STFU.

Doesn't have anything to do with this.
 

rinaldo00

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Great. I live in Chicago and we already pay among the highest sales tax in the country (over 10%) and now Amazon charges sales tax here. Luckily I never use Netflix.
 

fuzzylogik

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the federal tax is 18.4 cents. your quoting state + federal.

interesting - not to get off topic so i'll stop here. a bit more complicated as I've found out depending on what state you're in... if there's sales tax or a variable rate etc. bleh.
 

flashoverride

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It's a little less black and white as democrat vs republican though, this is something the leaders of Chicago are to blame for, and actually it seems from the article that the finance department made this ruling which is odd, sounds more like an increase in the scope of existing laws. While yeah those leaders are democrats, this is a local thing, how many republicans praised everything Arnold did in California?

Ooh ooh oh! That's an easy one! I can answer! None.

Yes, this is a Democrat thing. The city will get its cut because the city will get its cut, because if you want access to my customers, F you pay me.

Simple as that.
 

Flapjack

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Not sure how this is legal. Can anything from the Net Neutrality bill get pulled into stopping this? Not sure who is most familiar with the wordings of the bill on this forum but I would love to hear their input.
"Net neutrality" is a false moniker. When are people going to realize that net neutrality is what will allow the government to control how internet services are delivered and taxed? "Net Neutrality" is best compared to the "Fairness Doctrine", which was used and abused until the FCC abolished it during Reagan's tenure. NN is the same thing. It just another facet of the left's neverending quest for power over industry. Did people really think government would do the right thing and protect the consumer here???

This quote from the following article best sums it up:

"Establishing that the FCC has the authority to regulate the Internet is what they’re after, as it would give the FCC a Trojan Horse, a gift they’re framing as a safeguard to Internet freedom. These regulations that supposedly will keep the Internet open and fair can next be grown into a governing authority over Internet content, as once happened in radio."

Limbaugh is Right, Net Neutrality Is An Attack On Free Speech
http://www.forbes.com/sites/frankmi...tack-on-free-speech-so-why-is-comcast-for-it/
 

kbrickley

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Although this Chicago tax is the first time a city has tried to tax digital services it does appear that about half the USA states currently levy taxes of some sort on Netflix and other digital providers ... for some it is standard sales tax, others tax it under the communication act, and others have created special digital taxes for it. Although I am not fond of taxes, I have been paying taxes on Netflix for many years so I would prefer that any taxation occur at the State level, not the city level.
 

nilepez

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Nice trial balloon in a state which will reinforce its validity to its highest level
TX did it 15 years ago. This is only new to Chicago.

Makes you wonder if Chicago is just running a murder for hire business, and they need more taxes to pay the hitmen. They had 419 homicides last year IIRC.

And apropos of nothing

People are going to learn how to VPN in Chicago.
Not relevant. That's not how it'll work.

Put down the pitchforks people


How many cloud based services are actually going to give a fuck what one city wants? How many cloud based services are going to go through the trouble of checking IP addresses to see if they correspond to a Chicago based address? No one is going to pay a tax on this.

It'll go by your address, not by your IP. They can't tax someone simply because they're visiting a city. If they were doing that, this would truly be something new and unique, but as it stands, it's just new to Chicago.

Adobe CC charges taxes for their monthly sub in some states too.
 

Retronym

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...Yeah this is a Chicago going full retard thing, not a democrat thing.

Their mistake in this case was forgetting that their own constituents use Netflix, not 'the other guy' exclusively.

So yeah, they can't even steal right.
 
D

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This is probably why I'll never own a multi million dollar business because that's exactly what I would do.


Even better. Someone signs up from a ZIP code within Chicago city limits or an address using Chicago as the city, and then roll to a new page that says "I'm sorry. Due to Chicago's idiotic attempts to tax Netflix, we cannot knowingly service anyone who is a Chicago resident."

Then cover the page in ads for alternative forms of payment, Paypal, links to buying prepaid cards, VPN services, etc.

;)
 

amddragonpc

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I think Rahm Emanual just figured out how he's going to pay for all the tickets generated by his motorcade and entourage running through all the red light camera intersections and speeding through "safe zones" where camera's are also.
 

redmasc

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Ok, so they tax Netflix at 9%. Most of us have the stream only option and it's typically $7 a month for that service. 9% of $7 is .63 cents. Over a year, you'll be paying $7.56 with the new tax. Doesn't seem like a bit hit. I spend more on liquor at a bar in 1 night. It's still bull, and nickel and diming you, but it's not that bad.
 

Retronym

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Ok, so they tax Netflix at 9%. Most of us have the stream only option and it's typically $7 a month for that service. 9% of $7 is .63 cents. Over a year, you'll be paying $7.56 with the new tax. Doesn't seem like a bit hit. I spend more on liquor at a bar in 1 night. It's still bull, and nickel and diming you, but it's not that bad.

9% is outrageous. Percentages matter.
 
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