Chicago imposes ‘Netflix tax’

The US city of Chicago has introduced a ‘cloud tax’, which targets streamed entertainment services such as Netflix.

The new tax, which was enacted last week and comes into force in September, levies an extra 9% tax on ‘electronically delivered amusements’, covering Netflix and its media streaming counterparts. It applies to all Chicago residents.

The city already charges an ‘amusement tax’ at cinemas and music concerts and the new tax is an extension of this to account for new technology, City officials said.

The new rules only apply to streaming services, dubbed ‘rentals’ in the official documentation, not electronic sales, or permanent downloads.

The tax will generate about US$12 million a year, according to estimates.