Netflix will pass on cost of cloud tax

Netflix has said it will pass on the cost of the ‘cloud tax’ that will come into force in Chicago later this year to its subscribers.

The 9% tax, which will be levied on streaming services such as Netflix and Spotify but not download-to-own services such as iTunes, was approved approved by City authorities last week and comes into force in September.

“We will be adding it to the cost we charge subscribers,” a Netflix spokesman told TBI.

“Jurisdictions around the world, including the US, are trying to figure out ways to tax online services. This is one approach.”

The new charge is effectively an extension of Chicago’s ‘amusement tax’, which is applied at cinemas and concerts.