Chicago Netflix & Spotify Users to Pay More with New Streaming Tax

Netflix users in Chicago will soon have to pay more to stream music, TV and movies now that the City of Chicago has enacted a Cloud Tax. The change took effect on Wednesday, and it will apply to those with Chicago billing addresses. This new 9 percent tax will be applied to all streaming services like Netflix and Spotify and is expected to generate around $12 million a year.

While seemingly strange on the surface, Chicago isnt the first to initiate an Amusement Tax. The City of New York already has a surcharge on entertainment and information services for seeing a play, movie or concert. Chicagos new tax is expected to affect any paid television programming or electronically delivered music hello Netflix, HBO GO, Spotify and Apple Music! While this may be the first time we have heard of Digital Access to entertainment being taxed, many feel that this is just the first example showing how cities will try and make up for the loss in local sales tax revenues due to internet sales and streaming services. It also includes online gaming.

It will be interesting to see how this impacts eSports as a number of companies are starting to get into eSports betting. eSports online gambling site Unikrn has been in the news this week after after they pulled in another $7 million in funding and have been name backers like Mark Cuban and Binary Capital going all in with eSports. Unikrn has raised $10 million since looking for investors and allows people to place bets on upcoming video game matches in games such as League of Legends, Dota 2, and Starcraft 2.

Source: City of Chicago