ByMark J. Guillen, writer at
Netflix and other streaming and cloud services will have to collect 9% taxes from consumers.

Netflix Inc. is the online streaming giant, which is on its mission to ‘cut the cords’ of the viewers. The company is making the trend of Internet TV common rather than traditional pay cable TV. It has been an ongoing process that it is expanding in the international markets to maximize its global reach. Its recent expansions in the Australian and New Zealand region have added more to its charm. The company is also on the verge of introducing its original programming.

The streaming service, so far, is having quite a year in the industry. It is not only the market leader in the United States but is well ahead of its peers and competitors in the Australian market despite of facing tough competition from the local established businesses of online streaming service providers. Overall, it is doing a tremendous business in all the markets in which it is present, but there seems to be one problem that might trouble Netflix and other Internet TV businesses.

Netflix, Amazon, and others might be forced to pay cloud taxes in the coming times. As it is believed, the officials of Chicago are all set to take on a new aggressive tax approach that will ask the online consumers to pay 9% on Netflix, Amazon Web Service, and more. Chicago will be celebrating the Independence Day in a very different way, as its new tax rules will require companies to collect 9% in taxes every time a consumer uses any streaming or cloud services in the region.

The new regulations have been effective from today onwards and “came about after city officials expanded the interpretation of existing amusement and property lease taxes to encompass cloud-based technologies”, as reported by Fortune.

According to the lawyers at Reed Smith, who also flagged the new tax rules and approached in a blog post, stated that these taxes will be applicable on SaaS (Software as a Service), PaaS (Platform as a Service), and media streaming services.

Furthermore, Wynne explained in detail in a phone interview as to how these taxes and collection of them will be practically done. He stated, “It really comes from doing audits of consumers. Take our law firm. City officials will audit us for a bunch of taxes, and may find online services. Let’s say an audit of our firm reveals that we an invoice from Amazon or someone else with a Chicago address. The city authority has the choice of either going after the law firm or the companies who didn’t collect.”


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