Chicago to Apply 9% ‘Netflix Tax’ for ‘the Privilege to Witness, View or Participate in Amusements that are Delivered Electronically’Posted: July 11, 2015
“The amusement tax applies to charges paid for the privilege to witness, view or participate in an amusement.”
Netflix service in Chicago is about to get notably more expensive. On the hunt for new revenue, Chicago’s Department of Finance is applying two new rules that would impact companies like Netflix and Spotify. One covers “electronically delivered amusements” and another covers “nonpossessory computer leases”; together they form a unique and troubling new attempt by cities to tax any city resident that interacts with “the cloud. According to the Chicago Tribune, streaming service providers need to start collecting the tax starting September 1.
“This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically.”
The new tax is expected to net the city of Chicago an additional $12 million annually.
“The amusement tax applies to charges paid for the privilege to witness, view or participate in an amusement,” states the city’s new ruling (pdf).
“This includes not only charges paid for the privilege to witness, view or participate in amusements in person but also charges paid for the privilege to witness, view or participate in amusements that are delivered electronically.” Read the rest of this entry »
A majority of the cigarettes for sale in New York are illegally smuggled into the state, according to a report out Wednesday from the conservative research group the Tax Foundation.
According to the report, 56.9% of the cigarettes sold in New York—the highest importer of smuggled cigarettes—originated from out of state. Since 2006, cigarette smuggling in the state has risen sharply, by 59%, in tandem with a massive hike in cigarette taxes of 190%. New York state now has the highest cigarette taxes in the country, at $4.35 a pack. Residents of NYC must also pay an extra $1.50 per pack.
Cigarette taxes rose in 30 states and the District of Columbia between 2006 and 2012. Hiking tobacco taxes has been shown to make a dent in smoking rates—in particular among younger smokers—but also creates sometimes sharp state-to-state price differentials that incentivize illegal smuggling.
The state with the highest…
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California Gov. Jerry Brown on Sunday said California would start a tax-increase wave across the nation, but recent history suggests California’s tax increases will only accelerate the number of people who will leave California to other states with better tax climates.
When asked whether California was going to start a “tax-increase sweep” across the nation on CNN’s “State of the Union,” Brown agreed.
He said more people nationally will have to “share” more of the wealth they “extracted” to fund “collective” government.
But a Manhattan Institute study released in September found excessive regulations and high taxes forced business and California residents to flee the state en masse since 1990 to more economically friendly states like Texas.
The study found that 225,000 California residents are leaving the state per year, and most of the “destination states favored by Californians have lower taxes.”
Last Tuesday, Californians approved Proposition 30, which was Brown’s plan to raise rates on incomes above $250,000, with those making over $1 million having to pay a top marginal state income tax rate of 13.3%, which is the highest such rate of any state. Voters also approved of a statewide sales-tax increase.
Democrats also now have a supermajority in the state legislature, which means they can pass more tax increases. Proposition 13 amended the state Constitution to require a two-thirds majority in both houses of the state legislature for any increase in taxes.
There was more.
Many of California’s municipalities voted for additional tax increases, on top of the statewide tax increases.
Voters in Carmel-by-the-Sea, where Clint Eastwood served as mayor, voted to increase the sales tax by one- cent for 10 years, which will be used to fund pensions and capital projects like maintaining streets. Voters in Healdsburg and Santa Clara County approved of half-cent sales-tax increases.
Other municipalities whose residents voted for sales-tax increases include: Fresno, Marin, Napa, and Santa Clara counties and the cities of Albany, Capitola, Culver City, Moraga, Orinda, Salinas, Vacaville and Williams.
When more people who actually pay taxes in California begin leaving the state at a faster rate, California and its municipalities will have trouble finding enough people to tax and attracting business and entrepreneurs to the state.