Can New Chicago Taxes On Netflix, Apple, Spotify Withstand Legal Challenges?

Mr D from 63 writes: Today, a new "cloud tax" takes effect in the city of Chicago, targeting online databases and streaming entertainment services. Residents who stream movies and music from companies like Netflix and Spotify will now need to pay an additional 9% tax. This also applies to Chicago businesses that pay to use databases online. Chicago expects to collect $12 million a year as a result of the new tax ruling. From the 24/7 Wall St. story: "Also worth noting is that the city’s tax ruling in both cases avoids the issue of whether there is a close-enough connection (nexus, in legalese) to require providers like Netflix or others to collect either tax. International law firm ReedSmith weighs in on this point as well: '[O]nce the Department begins to audit and assess customers located within the city, many of those customers are likely to demand that providers collect the tax going forward. As a result, many providers will likely feel the need to register to collect the taxes, despite lacking nexus, and despite having strong arguments against the Department’s expansive interpretation of its taxing ordinances.'"

Comments

time to reference the Beatles Taxman

[turkeydance]

As their earnings placed them in the top tax bracket in the United Kingdom, the Beatles were liable to a 95% supertax introduced by Harold Wilson's Labour government (hence the lyrics "There's one for you, nineteen for me").

Another Reason...not to live in Chicago

[Ritz_Just_Ritz]

In case the crime and murder rate wasn't enough.

Wasn't it marginal?

[rsilvergun]

I suppose I could see them complaining if it was a flat 95%, but afaik the UK does Marginal taxes the same as the US, meaning they paid the same taxes as a lorry driver up to certain point.