Chicago successfully taxes streaming services
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Re: Chicago successfully taxes streaming services
#2Would we ever see legislation that would require companies to not increase the cost of digital goods after a tax is instituted? Alternatively, could we not just have a fixed tax contribution on goods each year rather than making it piecemeal per digital good sold? I find it weird to tax goods unless the existence of the tax is to change behavior. (not sure if that is the goal here?)
Re: Chicago successfully taxes streaming services
#3Would we ever see legislation that would require companies to not increase the cost of digital goods after a tax is instituted? Alternatively, could we not just have a fixed tax contribution on goods each year rather than making it piecemeal per digital good sold? I find it weird to tax goods unless the existence of the tax is to change behavior. (not sure if that is the goal here?)
The article says it's a response to a reduction in sales tax collected, so it would seem the goal is to collect revenue. A prohibition on raising the price seems unlikely; that's not usually the case with other things that act like sales taxes.
Re: Chicago successfully taxes streaming services
#4Would we ever see legislation that would require companies to not increase the cost of digital goods after a tax is instituted? Alternatively, could we not just have a fixed tax contribution on goods each year rather than making it piecemeal per digital good sold? I find it weird to tax goods unless the existence of the tax is to change behavior. (not sure if that is the goal here?)
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Re: Chicago successfully taxes streaming services
#5This stuff makes sense for cities, it’s just frustrating how much more difficult it makes it to operate a “mom and pop” software business. The complexity of potentially complying with hundreds of state and municipal governments - not where you are located but where online purchases originate - is a pretty significant deterrent to setting up a small side business. Imagine if every food truck had to pay taxes based not on where the truck is, but where the customers were from.
On the other hand, this is an obvious opportunity for payment processors to automate. I’m surprised sales tax still isn’t built in to stripe, for example.
Re: Chicago successfully taxes streaming services
#6It seems odd that this is referred to as the “Netflix” tax while most of the money has been collected from Eventbrite and Fandango, both of whom sell tickets to events physically happening in Chicago and both of whom would already be subject to a variety of other locality taxes as a result.
Even Netflix charges sales tax (or VAT, such as in Europe) in locations that require it (based off your billing address), so I find it hard to see this kind of thing as anything more than greedy governments taxing something simply because they can and know it’s big money.
Re: Chicago successfully taxes streaming services
#7Would we ever see legislation that would require companies to not increase the cost of digital goods after a tax is instituted? Alternatively, could we not just have a fixed tax contribution on goods each year rather than making it piecemeal per digital good sold? I find it weird to tax goods unless the existence of the tax is to change behavior. (not sure if that is the goal here?)
The article says it's a response to a reduction in sales tax collected, so it would seem the goal is to collect revenue. A prohibition on raising the price seems unlikely; that's not usually the case with other things that act like sales taxes.
It's always amusing that no one talks about more efficient ways to use revenues, than blindly increasing tax, when it comes to the government. Has ANY government service become any better, over time while taxes have constantly risen?
Re: Chicago successfully taxes streaming services
#8I thought the main reason states collect tax on Amazon purchases is because they have a presence in a state (distribution centers, warehouses, etc)?
I'm confused how the legal thinking goes that a company not based in Chicago, offering services on the internet, can be taxed.
(They don't even ship DVDs to most customers, whereas Amazon was shipping physical goods)
Re: Chicago successfully taxes streaming services
#9It seems odd that this is referred to as the “Netflix” tax while most of the money has been collected from Eventbrite and Fandango, both of whom sell tickets to events physically happening in Chicago and both of whom would already be subject to a variety of other locality taxes as a result. Even Netflix charges sales tax (or VAT, such as in Europe) in locations that require it (based off your billing address), so I f…
In Chicago's case, the tax is more about desperation than greed. But yes, greed is what got that city's government where it is today fiscally.
Re: Chicago successfully taxes streaming services
#10Earlier quoted context omitted.
The article says it's a response to a reduction in sales tax collected, so it would seem the goal is to collect revenue. A prohibition on raising the price seems unlikely; that's not usually the case with other things that act like sales taxes.
It's always amusing that no one talks about more efficient ways to use revenues, than blindly increasing tax, when it comes to the government. Has ANY government service become any better, over time while taxes have constantly risen?
There are certainly jurisdictions that are arguably under taxed because they only have the funds to provide meager services. See: Kansas Experiment.