They say if you want art, you have to pay for it. Similarly, if you want Netflix, you have to pay more for it?
That’s what’s happening to Chicago residents, effective this week. Beginning July 1, the city’s Department of Finance began collecting a tax on “electronically delivered amusements” — services that range from Netflix and Spotify to Lexis Nexis. The Verge reports that the new law adds a nine-percent tax fee to these kinds of streaming services, which, in theory, makes up for the lost income residents would bring to the city from renting or purchasing analog amusements from brick and mortar stores. Basically, they want the taxes you used to pay at Blockbuster. (At least you aren’t responsible for the late fees!)
It’s already a tricky system, as the consumer is responsible for paying the tax. As The Verge also reports:
Although the tax is technically levied on consumers, some companies are already preparing to collect it as part of the monthly bill. Netflix says it’s already making arrangements to add the tax to the cost charged to its Chicago customers. “Jurisdictions around the world, including the US, are trying to figure out ways to tax online services,” said a Netflix representative, reached by The Verge. “This is one approach.”
While I expect that some Netflix customers aren’t going to be too happy about paying extra for their subscription, I can imagine it also will ruffle the features of anyone who has any stake in certain privacy issues. After all, this means that the location of your streaming, or perhaps the address associated with your account, will start to pay a factor in how local governments can collect these fees. According to The Verge, “It would also mean further monitoring on where media is being consumed, which would mean the experience of using a VPN to watch a US-only video might be a harbinger of things to come.”
But the real question: will other cities catch on and levy a cloud tax of their own?