Chicago looks to the internet for more tax revenues

According to a CNN Money report, Chicago has introduced a new 9 percent tax on city residents who use internet services such as Netflix, Spotify and online gaming. The city expects the change to generate an extra $12 million annually.

The report reveals that last month Chicago’s finance department amended the established amusement tax to include “electronically delivered amusements.”

The change took effect last Wednesday, and applies to users with Chicago billing addresses; it adds Chicago to more than two dozen states which already charge sales tax on digital services.

The online gaming provision is interesting when positioned alongside a prediction on internet gambling in Illinois made by US analyst Chris Krafcik at a Californian online poker legalisation hearing recently.

Krafcik testified before the California Assembly Governmental Organization Committee that future intrastate legalisation initiatives could be classified in two waves; current drives in Pennsylvania, California and New York, which could see one or more legalisations by the end of 2017, constituting a second wave following legalisation already achieved in Nevada, Delaware and New Jersey.

The third wave would see one or more states legalise by 2020; this included Illinois, Rhode Island, Connecticut and Ohio.