With the recent election of Mayor Brandon Johnson, it is hard to imagine that enforcement activity of this somewhat nebulous tax will not continue to increase. Johnson’s calls for Big Banks Securities and Speculation Tax appear to have found little support at the state level
To embed, copy and paste the code into your website or blog:
Chicago is faced with a significant budget gap of $1.2 billion for fiscal year 2021, largely resulting from the economic impacts of COVID-19. In response to this budget gap, the 2021 Chicago Budget raises the tax rate on nonpossessory computer leases under the Chicago Personal Property Lease Transaction Tax (the “Cloud Tax”). Effective January 1, 2021, the Cloud Tax rate will be 9%, up from the 2020 rate of 7.25%, to equal the rate applied to all other property subject to the Chicago Personal Property Lease Transaction Tax (the “Lease Tax”).
The Cloud Tax applies to nearly all cloud computing services and software-as-a-service (“SaaS”) provided to users physically located in Chicago by classifying such arrangements as “nonpossessory computer leases.” This includes any lease “in which the customer obtains access to the provider’s computer and uses the computer and its software to input, modify or retrie