Chicago 'cloud tax' to add cost to Netflix, other streaming services (opens in new tab)

I wonder - what if you took the code for Popcorn Time, made your own front-end and used the majority of your funds to sign deals with production companies? If it's P2P you could be based in Iceland for all it matters. You could avoid goods and services taxes everywhere because P2P is ephemeral and you'd avoid lawsuits from the rights holders for being a legitimate front-end for their content.

Your attack surface would mainly be P2P blocking in countries that don't like the cut of your jib or throttling from ISPs.

How in the world is that not extortion? This is literally a cash grab by Chicago.

I think that when OP referred to extortion, he was referring to Chicago collecting through Netflix, instead of requiring its residents to remit the tax themselves.

If Netflix does not have a sufficient nexus with Chicago to force them to collect, I too would like to see them tell Chicago to go suck donkey lincolns. My reason is not because of any philosophical objection to their tax, but simply because of the effects if other municipalities also decide to do this.

Collecting tax for thousands of municipalities would be a nightmare. There would be a plethora of ways they would provide rate data. Some would have a reasonable way to get it, like a URL that retrieves the current rate and valid date range, and the upcoming rate when it is going to change. Some would have arcane online protocols. Some would have a .DOC file you can download. Some would have it in a memo that you can get a PDF copy of. UUUUUUGGGGGGGGGHHHHHHH!!!!!

Then there would be actually paying the tax. That would be like getting rates--many different methods of reporting, with many different requirements for what you have to report.

I've seen this with sales tax, and with VAT in the EU. Every Thor damned taxing authority seems to assume that they are the only taxing authority you are collecting taxes for, so if they make part or all of the process hard to automate it is no big deal. Let every municipality in on this, and small companies will need a full time person just dealing with tax rate tracking and tax reporting.

[1] well actually it's my state's use tax, not my state sales tax, in this case, but for all practical purposes they are the same.

Extortion: the practice of obtaining something, especially money, through force or threats. [1]

It's the literal definition of extortion. If you don't give the government your money, they'll [shut your business down|throw you in jail|fine the hell out of you]. The DVD tax is also extortion, but it's more easily justified because there are actual physical things moving through the city's jurisdiction.

1) https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...

You are responsible for paying taxes in any jurisdiction in which you have sufficient nexus to justify taxation. For individuals, residence is the generally accepted means for establishing residence, but some states also use employment as a nexus (such as New Jersey). For businesses, nexus is much broader, and generally includes any state in which the business is incorporated or registered to do business, any state in which it has facilities or employees, and (for sales and GST taxes) generally any state in which a customer is located.

The Chicago tax would be most similar to a sales/GST tax. Under well-established state and local tax principles Netflix, et al, could generally be required to collect the Chicago tax on sales/services to Chicago customers.

Note "collect sales tax." In at least some states, e.g. Massachusetts, residents and (I assume) businesses are asked on their state tax returns to report out-of-state purchases consumed within the state on which they are then responsible for use taxes equivalent to sales taxes.