Chicago will start taxing Netflix in September

Beginning in September, the city of Chicago will level a 9 percent "cloud tax" for online entertainment services like Netflix, Spotify, and Hulu — basically, any "paid television programming" or "electronically delivered music."

Previously, the same tax applied only to IRL entertainment, including movie tickets and sports events. When applied to online services, the tax will be collected based on billing information, which locates users in Chicago's jurisdiction.

The tax expansion is expected to collect some $12 million annually, but it's a revenue increase that appears negligible in light of the city's tens of billions of dollars in debts and pension obligations. In May, Moody's Investors Service downgraded Chicago's credit to junk status.

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