Thursday, July 02, 2015

Tax the Air You Breathe

  • The past five years have seen a huge shift in the way we consume media, as brick-and-mortar stores shift to digital subscriptions. It's been a valuable tradeoff for some, building billion-dollar companies and unlocking huge libraries of music and video for relatively paltry subscription fees, but it's also been a challenge for cities that rely on those businesses for revenue. Now, Chicago wants to take back those missing taxes, and the way it's retaking them has some lawyers up in arms.

    Today, a new "cloud tax" takes effect in the city of Chicago, targeting online databases and streaming entertainment services. It's a puzzling tax, cutting against many of the basic assumptions of the web, but the broader implications could be even more unsettling. Cloud services are built to be universal: Netflix works the same anywhere in the US, and except for rights constraints, you could extend that to the entire world. But many taxes are local — and as streaming services swallow up more and more of the world's entertainment, that could be a serious problem.

    Chicago's new tax is actually composed of two recent rulings made by the city's Department of Finance: one covering "electronically delivered amusements" and another covering "nonpossessory computer leases." Each one takes an existing tax law and extends it to levy an extra 9 percent tax on certain types of online services. The first ruling presumably covers streaming media services like Netflix and Spotify, while the second would cover remote database or computing platforms like Amazon Web Services or Lexis Nexis. Under the new law, what passes as $100 of server time in Springfield would cost $109 if you're conducting it from an office in Chicago.
So, the city puts nothing into the effort - no wiring, no towers, no inspections, no infrastructure of any sort - but by golly, they want a slice of the pie, just because you live here. We shop for the best deals whenever possible, but now, for transmitting electrons from a satellite through the air, we're shafted with another 9% tax to support an overgrown, ravenous behemoth of government that we despise.

Retirement can't come soon enough.

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40 Comments:

Anonymous Anonymous said...

Just when you think it can't get any worse, it does.

7/02/2015 12:15:00 AM  
Anonymous Anonymous said...

Brilliant on the part of City Government, and quite justified. These entities are providing services within the city, but those services are being utilized without paying the city for the privilege. Think of it as a usage tax. The City is owed it's cut of the action, whatever that might be. I can never understand the reluctance to pay local government it's fair cut, or tax, on an activity. Some people just want everything to be free, and don't want to give the City it's fair dues. Actually the City can put tax $$$ to better use than if those $$$ had stayed in some citizen's pocket to fritter away. Pay up and be happy.

7/02/2015 01:39:00 AM  
Anonymous Anonymous said...

You really need to tax those Fortune 500 Companies and their executives.
Stick it to them good and hard!
Make them Pay!

Because there is no way they would ever consider moving to Dallas, Houston, or a dozen other places with lower taxes, lower crime, and better weather.

7/02/2015 01:42:00 AM  
Anonymous Taypayer (in the suburbs) said...

As long as they keep it in Chicago - fine.

Maybe people will wake up and start voting out the status quo.


What concerns me is some commuter tax or tax on anyone who works in Chicago (a city tax).

Why not just cut spending? Problem solved. Or, start taxing LINK cards.


7/02/2015 03:05:00 AM  
Anonymous Anonymous said...

Interesting tax. So even though on your cell phone bill (Chicago residents) we pay on the average 25-30 worth of fees and taxes, now your cable bill we pay amusement tax and fee and franchise tax, now we get hit with additional tax just for streaming services. So essentially this is double tax. First for internet access and then for the service, also this could affect pay per view purchases on cable. You could get taxed twice. Any lawyers want to expound upon this?

7/02/2015 04:48:00 AM  
Anonymous Anonymous said...

Next they will enact a "thinking" tax for using your noggin in the City limits. The City Counsel won't have to pay a dime.

7/02/2015 05:27:00 AM  
Anonymous Anonymous said...

You're gonna love retirement SCC. My biggest decision of the day is whether to play golf, go to the beach, or swim some laps in my pool. Ahhhh. Stay safe all.

7/02/2015 05:51:00 AM  
Anonymous Anonymous said...

How, exactly, are they going to enforce this tax? How are they going to track who is using these services from Chicago?

7/02/2015 06:35:00 AM  
Anonymous Anonymous said...

I am waiting for Rahm to announce a he will install coin operated toilets in all city buildings. The coin operated toilets will be awarded in a No Bid 99 year contract to RJ Vanecko plumbing Company.

2 years 9 months and I am outta here.

7/02/2015 07:05:00 AM  
Anonymous Anonymous said...

SCC, inus r D to work in a very large law firm downtown. When I saw Lexis Nexus on the list of taxable cloud services I almost fell over. There are untold number of law firms all across the city. Each and everyone used L-N, every day. There will a ton of cash flying out the window

7/02/2015 07:13:00 AM  
Blogger The Keesing Bandit said...

I like clouds. They are so pretty. It would be a shame to tax them.

Now, kees me you fool!!!!

7/02/2015 07:33:00 AM  
Blogger Rob Crawford said...

Taxing cloud computing? Say goodbye to any start ups, present or future.

7/02/2015 07:38:00 AM  
Anonymous Anonymous said...

You're right -- the City has no skin in this game. Just wants to lay back on a chaise lounge with one hand extended for money. How is the City going to enforce this tax? Will all Internet services -- even those in other states, other countries -- have to report their customers? That'll drive their administrative costs up -- guess who'll pay?

...and Chicago is supposed to be a "technology incubator." AT&T Uverse and others are some of the slowest connections in the country to begin with.

https://downdetector.com/status/att/map/

Oh -- watch out that AT&T doesn't try to hit you with a $7.00/month "leased equipment fee" for a residential gateway (modem) you've already paid for in full.

Many other countries are far, far ahead of the U.S. in average connection speeds, for much less money to boot. South Korea is the fastest in the world. The U.S. is only #17.

http://www.businessinsider.com/fastest-internet-connection-speeds-2015-5

Test your speeds here --

http://www.netindex.com/download/allcountries/

So -- is Chicago going to use the extorted funds to wi-fi the 606 Trail so that idlers can txt while rollerblading and smack into benches and things? No bathrooms, though; they are "monitoring that situation." Better wear a slicker, guys, while you're standing there looking up "monitoring..."

606 -- take the "Yellow Stream!"

*

7/02/2015 08:04:00 AM  
Anonymous Anonymous said...

The city is getting more creative in figuring out what else to tax. I already changed my 3 cellphones billing address to a relative out of state... They just don't get it; no business sense what so ever - that people and businesses will run in other directions because of the over taxation here.

You should try; just once, reducing and eliminating these crazy taxes for people and businesses and watch how quick the economy turn around. Better yet, just file for bankruptcy; pretty soon, you won't be able to keep up with those high pension costs anyway - its all going to come ahead.

Yes, I'm willing to bet, you will soon be taxed for the air you breathe.

7/02/2015 08:33:00 AM  
Anonymous Anonymous said...

For all of the naysayers let me ask you this simple question: If the city of Chicago is such a horrendous over taxed environment then why are rich singles and rich families moving in to the city? Look all around you, the city of Chicago is going through a second building boom and real estate boom. Property values have hit another high from the 2006 peak prices. New, shiny, sky high condominiums being built and huge 3000 to 5000 square foot single family homes being built. I know this because I am a copper but also a real estate agent. Mark my words; Chicago is going to be the San Francisco of the Midwest. Buy yourself a house and if you own one, buy more properties.

Mayor Daley and now Mayor Emanuel are brilliant. They are making city living so expensive that the poor and uneducated have no alternatives but to leave. Then the rich, well to do, educated and cultured move right in. Just look at how some neighborhoods have been transformed- bars, restaurants with an ample night life, entertainment districts, expensive boutique shops, coffee shops with fair trade cofee (that isn't cheap by the way), home made beer brewery stores, etc.

Do you think all of that is a mirage? A blip on the radar screen? You are wrong. Like I told you, Chicago is going to be the San Francisco of the Midwest. If you are smart, invest your money in properties in gentrifying neighborhoods. Laugh at me or laugh all the way to the bank. The choice is yours.

7/02/2015 08:40:00 AM  
Anonymous Anonymous said...

The courts have ruled you can't tax the airwaves--that's why you don't see TV taxes on Dish deliver programming.

These guys will never learn

7/02/2015 09:10:00 AM  
Anonymous Anonymous said...





The price we pay for corrupt government.

7/02/2015 09:50:00 AM  
Anonymous Anonymous said...

You ought to start a list of all the things the city taxes, just because they can. And include the taxes on big and small businesses. Makes you wonder why anyone would choose to live, work, or try to do business in the city.

7/02/2015 09:50:00 AM  
Anonymous Anonymous said...

From farther down the blog -- Re: attacks on Internet service

Vandals slice cable wires in Northern California in possible 'coordinated attack'

July 01, 2015

"Someone sliced high-capacity fiber optic cables in Northern California Tuesday in the latest of a dozen cases that have prompted massive Internet outages and stoked fears of a "coordinated attack" as the FBI investigates.

"The FBI is investigating the wave of attacks, which on Tuesday disrupted service in some areas of Northern California, including the Sacramento and Rocklin areas. The damage is being treated as vandalism, although Internet provider Wave Broadband called the outage part of a "coordinated attack" on fiber cables.

"An FBI spokesman said it appears to be the latest in about a dozen acts of vandalism at San Francisco Bay Area locations in the last year.

"According to USA Today, a person or persons broke into an underground vault and cut three fiber-optic cables belonging to Colorado-based service providers Level 3 and Zayo.

"When it affects multiple companies and cities, it does become disturbing," FBI Special Agent Greg Wuthrich told the newspaper. "We definitely need the public's assistance."

"Repairs were underway late Tuesday morning, but there was no estimated time of when service would be restored.

"Tuesday's outage is one of 11 attacks on high-capacity Internet cables in California's San Francisco Bay Area within the past year."

http://www.foxnews.com/us/2015/07/01/internet-outage-in-northern-california-act-vandalism-fbi-says/?intcmp=latestnews

Not just hacking, pfishing, viruses, and massive database breaches -- crowbars and cable shears now.

7/02/2015 09:52:00 AM  
Blogger Cuthbert J. Twillie said...

OFF-TOPIC, sort of: I found this in today's (Thurs) Chicago Tribune. It relates to the CPS *budget woes* and Tiny Dancer's current brain-fart of a solution .........
CPS set for $200 million in cuts; mayor floats property tax plan
--- 'Emanuel also proposed a $175 million property tax increase to help pay for teacher pensions — but only if the state and Chicago's teachers chip in ....' ---

Oh really Rahm, "The State". Do you mean as in Illinois TAXPAYERS that don't live in your fucked up war zone of Chiraq? Illinois TAXPAYERS that live in ...say... DuPage, Will, Kane, or Lake County, which last I checked my map, are not in your cesspool of a crap-hole city. Do you mean Illinois TAXPAYERS that live so far from Chiraq they have never, ever, not once in their lives set foot in your crime infested sewer and do not ever plan to.

Do you mean Illinois TAXPAYERS that fled Chicago decades ago so they could live in a crime free area where they could raise their family in PEACE -- peace that comes from not having to worry about anyone you love catching a stray bullet that was fired by one of your gang-banging savage residents.

Do you mean Illinois TAXPAYERS who already pay high taxes, in areas they decided to move to, so their children, or future children, could get a good, above average education in a crime free environment. In a school taught by actual qualified teachers -- not some brain-dead leftist automaton member of the Chicago Teachers Union who don't give a shit about 'the children'.

You mean exactly THAT when you say; "the state" right, Mayor Flaming Tutu? Yeah, YOU DO!! Well guess what you sawed-off, 9.5 Digit Runt: -- FUCK YOU!!

The day that that happens you better get ready for ALL Illinois Taxpayers to be able to VOTE in Chicago Elections !!! How do you like that, huh! You little fucking asshole!

7/02/2015 09:54:00 AM  
Anonymous Anonymous said...

How about just leasing the parking spots in residential neighborhoods? You want that spot in front, you lease it.

7/02/2015 11:17:00 AM  
Anonymous Anonymous said...

This and more is why you can't keep retired city employees to stay in Chicago. This very important tax base is leaving in droves. The liberal Democrats committing Greece type financial suicide.

7/02/2015 12:17:00 PM  
Anonymous Revolversaurus (ret) said...

08:40 am

When I retired I severed every contact I had with Chiraq. Then I laughed all the way to the bank. Now I am sitting on my deck behind my huge home looking out over my multiple acres and getting ready to grill a yummy yummy steak. While I am eating it I will be laughing AT you!

You can keep that wasteland, I'm having A LOT of fun now!

7/02/2015 12:30:00 PM  
Anonymous Anonymous said...

Brilliant on the part of City Government, and quite justified. These entities are providing services within the city, but those services are being utilized without paying the city for the privilege. Think of it as a usage tax. The City is owed it's cut of the action, whatever that might be. I can never understand the reluctance to pay local government it's fair cut, or tax, on an activity. Some people just want everything to be free, and don't want to give the City it's fair dues. Actually the City can put tax $$$ to better use than if those $$$ had stayed in some citizen's pocket to fritter away. Pay up and be happy.

7/02/2015 01:39:00 AM

We already pay taxes to have internet that delivers the content. We pay taxes for broadcast fees to broadcast channels. We also pay a regional sports fee in addition to the broadcast fee, which is duplicate broadcast fee for those who do not have sports packages. We pay increased City and State taxes on the "privilege" to pay for our own internet, phone and cable. We already pay taxes for the "privilege" now we are also having to pay taxes to stream content over the internet that we are already taxed on. That's double taxation. I don't understand how this is legal. Nickle and dime citizens to death. Cannot wait to leave this City.

7/02/2015 01:06:00 PM  
Anonymous Anonymous said...

How about just leasing the parking spots in residential neighborhoods? You want that spot in front, you lease it.

7/02/2015 11:17:00 AM

How about just getting our parking meters back. Go to court and claim emergency just like they did for our pension payments and nullify that contract. That is half a billion a year in revenue lost.

7/02/2015 01:15:00 PM  
Anonymous Anonymous said...

Oh really Rahm, "The State". Do you mean as in Illinois TAXPAYERS that don't live in your fucked up war zone of Chiraq? Illinois TAXPAYERS that live in ...say... DuPage, Will, Kane, or Lake County, which last I checked my map, are not in your cesspool of a crap-hole city. Do you mean Illinois TAXPAYERS that live so far from Chiraq they have never, ever, not once in their lives set foot in your crime infested sewer and do not ever plan to.

Nice rant, but know all the facts before u act like u pay for ur teachers in ur town.Since the teachers don t pay much into their pensions the state covers most of it. Which means the state uses money sent buy the all the towns including Chicago to pay into their pension. But only Chicago pays into chicago teachers pension..nothing from the state. So Chicagoan's thus are getting taxed twice...as u said," WHY SHOULD I PAY FOR TEACHERS IN A TOWN I DON T EVER PLAN TO VISIT". SO GET OFF UR HORSE .. evry one is getting screwed in this state.

7/02/2015 03:09:00 PM  
Anonymous Anonymous said...

"I am...a real estate agent. Mark my words; Chicago is going to be the San Francisco of the Midwest..."

7/02/2015 08:40:00 AM

7th iteration.

7/02/2015 04:25:00 PM  
Anonymous Anonymous said...

"If the city of Chicago is such a horrendous over taxed environment then why are rich singles and rich families moving in to the city? Like I told you, Chicago is going to be the San Francisco of the Midwest. If you are smart, invest your money in properties in gentrifying neighborhoods. Laugh at me or laugh all the way to the bank. The choice is yours."

Whatever you're drinking or smoking, it has thoroughly fucked your reasoning processes. As businesses leave Illinois for more favorable turf, what do you think those rich people will do? Get jobs spreading the special sauce and bagging fries? What happens when they realize that a third of the monies collected by the state are wasted due to inefficiency and corruption? What will they do when crime begins to permeate their neighborhoods?

I wish you well on your get-rich scheme. Let us know how using a LINK card works out for you.

7/02/2015 04:50:00 PM  
Anonymous Anonymous said...

Anonymous said...

"If the city of Chicago is such a horrendous over taxed environment then why are rich singles and rich families moving in to the city? Like I told you, Chicago is going to be the San Francisco of the Midwest. If you are smart, invest your money in properties in gentrifying neighborhoods. Laugh at me or laugh all the way to the bank. The choice is yours."

Whatever you're drinking or smoking, it has thoroughly fucked your reasoning processes. As businesses leave Illinois for more favorable turf, what do you think those rich people will do? Get jobs spreading the special sauce and bagging fries? What happens when they realize that a third of the monies collected by the state are wasted due to inefficiency and corruption? What will they do when crime begins to permeate their neighborhoods?

I wish you well on your get-rich scheme. Let us know how using a LINK card works out for you.

7/02/2015 04:50:00 PM

I am a policeman. My wife is a full time realtor. I am a part time realtor. Too many police officers are negative just for the sake of being negative. The Avondale neighborhood just saw huge price increases and homes received multiple bidding offers. The rest of Chicago has seen home prices reach back to their peak levels. Let me ask you this question: is anyone putting a gun to these people's heads? Horner Park is seeing new development. Look around you, Chicago is going through another building boom. Look around you- neighborhoods are being transformed. New coffee shops that sell fair trade coffee, expensive breweries, expensive specialized boutique shops, condos for 300K to 600K and houses selling for 800K to 1.5 million dollars. Is all of this an aberration? I think not. Chicago is also seeing a lot of money from China being invested in real estate. Chicago is attracting a lot of educated people from all over the Midwest. Chicago is going to be the San Francisco of the Midwest. I just closed on a condo by Division and Sacremento. The two gentleman are well educated, cultured and well to do. One is from Germany and his partner is a doctor. So despite the evidence I presented and that you can visually see you will deny it right? Just because you are a bitter police man. Once again, mark my words, Chicago is going to be the San Francisco of the Midwest. Laugh at me or laugh all the way to the bank.

7/02/2015 06:49:00 PM  
Anonymous Anonymous said...

I am waiting for Rahm to announce a he will install coin operated toilets in all city buildings. The coin operated toilets will be awarded in a No Bid 99 year contract to RJ Vanecko plumbing Company.

2 years 9 months and I am outta here.


1 year 8 months and I'M OUTTA HERE!

7/02/2015 06:57:00 PM  
Anonymous Anonymous said...

Property values have hit another high from the 2006 peak prices.

GOOD!

I hope they keep going up at least until the end of 2017. I will retire in that year and would love to profit from the booming real estate market you say Chicago is becoming.

I truly hope that Chicago does turn into the San Francisco of the Midwest, once I move. And then the earth can open up and swallow this disgusting city.

7/02/2015 07:07:00 PM  
Anonymous Anonymous said...

"Cannot wait to leave this City."

7/02/2015 01:06:00 PM

S' ok. In the meantime, don't wear yourself out on that troll there.

"Actually the City can put tax $$$ to better use than if those $$$ had stayed in some citizen's pocket to fritter away."

7/02/2015 01:39:00 AM

One-string guitar, plonk plonk plonk all the time with this crap. >yawn< Ignore.

7/02/2015 07:10:00 PM  
Anonymous Stahu said...

Let me guess: they've already spent this new source of revenue - and it wasn't on the pension funds.

7/02/2015 09:41:00 PM  
Anonymous Anonymous said...

"My wife is a full time realtor. I am a part time realtor. Chicago is going to be the San Francisco of the Midwest. Once again, mark my words, Chicago is going to be the San Francisco of the Midwest."

7/02/2015 06:49:00 PM

8th iteration.

7/03/2015 12:26:00 AM  
Anonymous Anonymous said...

Like how all owners of electric vehicles don't pay any taxes which support roads, such as a gas tax for gas vehicles. Time for the mileage tax on all vehicles and dropping of the gas tax..
We pay gas taxes for roads on the gas we use for lawnmowers.....???

7/03/2015 01:36:00 AM  
Blogger Cuthbert J. Twillie said...

To --- 7/02/2015 03:09:00 PM

Maybe you missed the part about me telling that little runt Rahm to come look at my TAX BILL. It's all fucking PENSIONS --> Elem School Teachers, High School Teachers, College Teachers, and State Teachers. Plus 'little things' like Fire Dept & Police Pensions (that was sarcasm bud).

And My taxes are higher than most in IL already. But that was our choosing, made long ago for GOOD SCHOOLS. My point being is I PAY for what I asked, and that little raccoon face mutt AIN'T getting his slimy hands in my fucking pocket! Not in my fucking lifetime.

btw, Our Police are top notch, so I have no problem paying their pension either.

Though our FD sucks -- they let houses burn to the ground before they turn a hose on -- seen with MY EYES TWICE!!

7/03/2015 07:23:00 AM  
Anonymous Anonymous said...

"Buy yourself a house and if you own one, buy more properties," say the two realtors, over and over.

"Mayor Daley and now Mayor Emanuel are brilliant. They are making city living so expensive that the poor and uneducated have no alternatives but to leave."

You're a real prince, you know that?

"It is easier for a camel to pass through the eye of a needle, than for a rich man to enter into the kingdom of heaven." -- Matthew 19:24

God damn you all for the immense suffering you cause.

"...bars, restaurants with an ample night life, entertainment districts, expensive boutique shops, coffee shops with fair trade cofee [sic]...home made beer brewery stores..." and all the other trendy "niche" businesses that are the first to go belly-up in a recession.

"Chicago is going to be the San Francisco of the Midwest."

7/02/2015 08:40:00 AM

A. Not with "brilliant" Mayor Emanuel's new 9% data tax, it isn't. "Startups" are already looking elsewhere.

B. Been there, done that. Bubbles burst. Remember Frisco's first "dotcom collapse?"

Nobody Can Figure Out How to Fix San Francisco's Housing Crisis

July 1, 2015

"For better or worse, San Francisco has come to embody the term "gentrification." Between the city's tech-fueled boom, astronomical increase in the cost of living, and struggles with the influx of tech workers, the tale of SF's skyrocketing housing prices has become the biggest continuing news story in the region so far this decade.

"We're at a point where headlines about evictions of elderly and disabled people due to property owners desiring to cash in have become so commonplace that outrage has been replaced with malaise and existential dread that our community will never be the same again."

"The city's residents are being displaced at alarming rates...the number of no-fault evictions in San Francisco went from 664 in 2012 to 1432 in 2013 — a 116 percent jump. For comparison, Los Angeles, a city with a population 4.5 times the size of San Francisco, had 376 such evictions.

"The average one-bedroom apartment in San Francisco goes for about $3,500 per month, up by almost $1000 from two years ago...In order to purchase a median price home ($743,000) in the Bay Area you need to earn just above $140,000. And to afford the median price of $1,045,000 for a home in San Francisco, you would need to earn $200,000, putting you in the 94th percentile of American income."

Sounds great.

It it any wonder that the logo of a very large realty firm is a huge balloon sailing off into the blue sky, filled with great gusts of its own hot air?

Just wait for the "POP!" -- again.

7/03/2015 12:43:00 PM  
Anonymous Anonymous said...

I buy as much as my car will carry when I'm out of the city, county and state!

This place is one huge, robin hood style rip off!

When I'm done, I'm heading out of state for good!

7/04/2015 12:29:00 PM  
Anonymous Anonymous said...

Just change your billing address on netflix, amazon, or any view site to a non chicago address, the cloud does not care what the billing address is


Rahm, kiss my ass

7/05/2015 09:30:00 PM  
Anonymous Anonymous said...

I like Mr. Rahm.

7/25/2015 06:04:00 AM  

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