The ‘Gift’ to Chicagoans

Just three days before the Independence Day, the Chicago Law enforcers presented the nation with a bizarre gift; the “Tax”! Yes folks, dubbed as the “Cloud Tax”, the tax is a 9% addition to subscription rates of every streaming service including Netflix, Amazon Instant Video, Spotify, Hulu and similar streaming sites. The tax is not only limited to online streaming services, but every activity that involves electronically accessing TV shows, videos or movies, playing online games, listening to music and cloud services gets the dose of this Cloud Tax.

One thing to note here is that the tax does not apply to those who download music; hence Chicagoans who prefer to download their particular blend of music are immune to this fatal tax!

The Tax may be a consequence of the rage that has been mounting over the years; a rage possessed by none other than the traditional entertainment providers and brick-and-mortar media distributors. It seems that the government wants to put a halt or better yet slow down the ambitions of the players in the steaming industry. Are the law enforcers trying to help the traditional businesses into launching a turnaround? Or is it just that streaming services had a considerable profit margin, one that the government waited to get hands on until the industry matured? Only time will tell the true motive behind the law! Many tech-savvy minds however, believe that the cloud tax is strategy employed by the Chicago Ministry of Finance to bring back lost revenues from businesses that started offering digital subscriptions.

The story doesn’t end here!

Another ordinance that surfaced with the ‘Cloud Tax’ adds a 9% tax to “non-possessory computer leases” a term used to describe cloud storage, real estate listing, research databases, online project management services and much more.

The lawmen at Reed Smith put this news to words by describing it as “staggering in their breath”. They believe that Chicago is more direct than any other US jurisdiction. This judgment is quite accurate as far as the online streaming industry is concerned.

The new sanctions are expected to bag a hefty amount of $12 million per annum according to a city spokesperson. This tax may be hard to evade, but as the optimists say “where there’s a will, there’s a way”. As the taxes will be imposed based on Chicago billing addresses, so all the cloud subscribers need to do is get a post-office box in a different state or jurisdiction. Similarly, businesses could subscribe to services from out-of-town subsidiaries to evade the tax.

Netflix’s reaction to the Law

Netflix has already stated its plans to add the tax to its monthly subscription fees. Australian Netflix users are already in hot, in fact boiling water! Australian Netflix subscribers have already been bullied through added 10% tax on digital services, and this tax takes the tally to a staggering 19% addition to the subscription price. Also, the new Australian cyber law passed on June 23rd deprived users from accessing a lot of websites which were accused of copyright infringements; for instance; The Pirate Bay, KickAss Torrents and other websites based on the concept of P2P-file sharing.

Until this change in subscription plan is made global, Netflix needs to monitor the location and IPs of its subscribers closely, and the only way you can dodge the eye of Netflix is through a VPN. Online Streaming service subscribers can change their location using a VPN, posing to reside in any other region that is tax free! So if you want to keep your money in your pocket, we suggest you Get Ivacy now!