Sony has warned PlayStation users in Chicago, United States that they will soon have to pay an extra “9% cloud tax” on purchases on PlayStation stores, like PlayStation Now, PlayStation Plus, and other PlayStation subscription services.
Taxes in the U.S. are subject to change by state, county, and city taxing authorities. In order to comply with rules relating to the City of Chicago Amusement Tax, beginning November 14, 2018, PlayStation Store will start collecting amusement tax on receipts from PlayStation Plus, PlayStation Now, PlayStation Vue, PlayStation Music, PlayStation Video On Demand, and PlayStation Video Live Events from customers with a billing address within the City of Chicago. The city of Chicago’s amusement tax rate is currently 9%.
It is happening because of the Chicago’s Amusement Tax which is scheduled to start on November 14, 2018.
Chicago Amusement Tax, though, does not apply to purchases of video games. People in Chicago who want to buy a game from the PlayStation store don’t need to pay the extra amusement tax.
The amusement tax (aka video game tax) is only applied for rentals, like streaming or temporary downloads, where there are subscription fees, per-event fees, etc.
This is the reason why PlayStation Plus and PlayStation Now are definitely affected of the amusement tax.
The Chicago Amusement Tax is the first of its kind in the United States. It was actually first made for live events only, but the Chicago government extended the cover of the tax law to online services, too.
Aside from streaming giants Netflix and Spotify, Sony has joined in collecting the amusement tax.
But many companies are currently challenging the Chicago Amusement Tax on a legal basis such as the tech giant Apple. They have filed a complaint against the city of Chicago over the new tax.
It’s expected that PC, Nintendo, and Xbox customers will also be affected by the Chicago Amusement Tax.
Link to “Chicago Amusement Tax”: https://www.cityofchicago.org/city/en/depts/fin/supp_info/revenue/tax_list/amusement_tax.html