Do you use Netflix? HBO Now? Spotify? Apple's new streaming music service? Soundcloud? Any cloud based service like Dropbox?

You are going to pay a 9% tax on that service thanks to the city of Chicago Department of Finance.

It's tracked by IP address-so the only way to avoid the tax is to base all your cloud operations out of the city.

Do you have a server that functions as a cloud for your organization in the city? 9% tax. Interestingly, years ago CME Group built a remote data site in Aurora. It wasn't to avoid the tax, because the tax wasn't contemplated at the time.

A quote from the article:

Some lawyers have already taken issue with the city's move. After the rulings were announced, Reed Smith partner Michael Wynne argued the taxes violate both the Federal Telecommunications Act and, in the case of the second ruling, 1998's Internet Tax Freedom Act, intended to prevent discrimination against services delivered over the internet. "I could do that same activity of research using books or periodicals without being taxed," Wynne says. "So it does seem like I'm being picked on because I chose to do it online."

I know that Mayor Emanuel has been supportive of a startup community, but this is a direct tax on that community. Early stage ventures do everything they can to manage their burn rate-taxing all the services they use isn't helping.